TheDrop Market Analysis, 02/12/25

Markets sank after a not-so-promising CPI report.

Fed Chair Jerome Powell.

The S&P 500 sank 0.3% and the Dow sank 0.5%, respectively. Meanwhile, the Nasdaq composite did not perform any better, barely making an increase in a sea of red. The Russell made an outstandingly bearish result today with an over 0.85% loss.

Investors went on a selling frenzy following the release of February's CPI report data, showing that inflation was trending upwards. Contrary to what most people including investors have hoped to start off the year, instead prices have gone up, setting a very poor foundation for the economic health for the rest of the year.

Investors also panicked over the Fed's decision to hold off from rate cuts, per Jerome Powell's statement that he is in "no hurry" to do said cuts. Trump, meanwhile, ignored Powell's remarks and instead promised rate cuts which he ran on in his 2024 campaign even though a rate cut could push inflation even higher than it already is.

Part of the magnificent 7 stocks fell; including Nvidia, and Microsoft. Target and Alphabet also made some small losses throughout the day. However, some stocks within this group presented maximum resilience, like Apple and Tesla. Even Intel made a strong showing today.

In the after hours of the day, two stocks had radically different trends: Reddit and Robinhood. Reddit, despite reporting strong users, failed to deliver on user growth, thus leading the stock to tumble by over 15%. By a similar margin, Robinhood skyrocketed as its respective earnings report beat expectations.