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Global markets moved into a risk-off mode at the end of February as equities fell, bond prices rose, and investors shifted toward safer assets. The move followed a mix of pressure points, including a technology-led selloff, hotter US producer inflation data, and renewed geopolitical concerns tied to US-Iran tensions.
By 11 a.m. New York time, the S&P 500 had fallen 0.6%, while the Nasdaq 100 lost 0.4% and the Dow Jones Industrial Average dropped 1.2%. In contrast, the Stoxx Europe 600 edged up 0.1%, while the MSCI World Index declined 0.3%.
In digital assets, Bitcoin fell 2% to $66,106.29, and Ether dropped 4% to $1,948.67. Meanwhile, the yield on the 10-year US Treasury declined by 3 basis points to 3.97%, showing stronger demand for government debt.
Wall Street traders reduced exposure to riskier assets as February neared its close. The latest decline put the S&P 500 on track for its worst month since March. Market participants focused on three immediate issues: weakness in major technology shares, inflation signals that may delay Federal Reserve rate cuts, and rising geopolitical uncertainty.
US producer inflation data added to the cautious mood. The producer price index rose 0.5% in January, driven by services, while the core gauge excluding food and energy posted its biggest increase since July. These figures reinforced expectations that the Federal Reserve may keep rates higher for longer.
Swap traders trimmed expectations for policy easing after the data. They now price in a first full rate cut only in September. That shift did not trigger a sharp bond sell-off, but it did support a broader rotation away from higher-risk equity segments.
NVIDIA remained in the spotlight after a strong earnings report failed to lift its stock. Shares fell 5.5% on Thursday and then dropped another 2% on Friday. The two-day decline erased about $360 billion from the company’s market value and dragged broader sentiment lower across technology stocks.
The selloff stood out because NVIDIA’s near-term business outlook remained strong. The company guided for first-quarter revenue of $78 billion, well above the prior Wall Street consensus of around $73 billion. Even so, investors focused less on current results and more on whether AI infrastructure spending can hold at current levels.
NVIDIA now trades at less than 22 times forward earnings, below its five-year average of 37 and near the S&P 500’s multiple. Despite that lower valuation, the stock has faced pressure as investors question future returns on heavy capital spending by major AI developers such as Meta, Alphabet, Microsoft, and Amazon.
Analysts and portfolio managers have described a disconnect between NVIDIA’s fundamentals and its recent price action. However, the market’s focus has shifted toward the durability of demand and the timing of profit generation from large AI investments. That concern has also contributed to rotation into less volatile sectors.
US Treasuries rose, with 10-year yields slipping below 4%, marking their best monthly performance in a year. Similarly, Germany and Britain’s 10-year yields dropped. Geopolitical concerns, particularly in Iran, added further uncertainty. Meanwhile, software stocks showed signs of stabilization, with an exchange-traded fund tracking US software set to outperform semiconductor stocks for the first time in 11 weeks, indicating sector rotation.
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Dell Technologies Inc. issued an AI server sales outlook that exceeded estimates.
CoreWeave Inc. reported a larger-than-expected loss and increased capital expenditures.
Paramount Skydance Corp. clinched a deal for Warner Bros. Discovery Inc. after a prolonged bidding contest.
Netflix Inc. exited the Warner Bros. Discovery bidding process.
Block Inc. said it will cut about 4,000 jobs as part of an AI-driven strategy shift.
Block Inc. also raised its full-year gross profit outlook.
Sweetgreen Inc. reported a weak fourth quarter and forecast softer annual sales than Wall Street expected.
Duolingo Inc. said subscriber growth efforts will slow earnings growth and pressure margins in the near term.
NVIDIA Corp. increased spending on stakes in partners and customers, using more than $70 billion in cash over the last fiscal year.
Anthropic PBC rejected the Pentagon’s latest offer in a dispute over AI safeguards for military use.
OpenAI raised $110 billion in a deal that values the company at $730 billion, reviving concerns about AI valuation.
This market session reflected a broad repricing of risk. Investors reacted to inflation, questions about AI spending, and geopolitical uncertainty simultaneously, pushing equities lower and supporting bonds and gold.
