TheDrop Market Analysis, 02/27/25

Markets sold off following Nvidia's groundbreaking earnings report release.

Nvidia logo.

The S&P fell 1.6%, the Dow fell 0.4%, and the Nasdaq fell 2.8%; furthermore, the value of gold and the USD plummeted over the course of the day. Investors in all kinds of markets, ranging from stocks to bonds to even currency, sold off in droves today, finishing the week on a poor note.

Investors flooded the markets to sell their equity for two reasons. First was the meeting between British Prime Minister Keir Starmer and U.S. President Donald Trump. In that meeting, although they discussed possibly ending the war in Ukraine, they also touched on tariff policy, which Starmer refused to respond to publicly but most likely conceded to Trump that reciprocal tariffs would be left without much of a response from them in order to maintain their relationship.

Additionally, investors took their equity away due to Nvidia's earnings report. Having been released in the afternoon of the 26th of February, the report was the only sense of hope for a very bearish market struggling from hyper-volatility as part of the early days of Trump's 2nd term. Nvidia did once again outperform expectations, performing 3.08% in revenue and 5.22% in EPS than what investors anticipated. However, Nvidia reported lower margin, which single handedly led investors to ignore the growing dominance of the company's Blackwell chip but instead panic on the stock market.

Nvidia stock plummeted very rapidly, starting strong in the pre-market but weakening from there. The stock fell 8.5%, which remains as the single largest drop in the stock since DeepSeek AI's entrance into the U.S. technology market. Most other AI stocks, all of which looked up to Nvidia in the industry, all fell along with it; Microsoft fell 1.8% and Google fell 2.6%, for instance. Google continued to rail downwards as its classification as a monopoly earlier this week by the U.S. government set the stock downward even more.