Markets fall with selling in Nasdaq stocks leading the decline

Dow dropped 193 with selling in the PM, decliners over advancers 2-1 & NAZ plunged 530 (session low).  The MLP index was flattish in the 321 & the REIT index added 2+ to 415.  Junk bond funds fluctuated & Treasuries had limited selling, lifting yields.  Oil rose 1+ taking it over 70 & gold tumbled 30 to 280 (more on both below).

Dow Jones Industrials

Initial filings for unemployment benefits hit their highest level of the year last week in another potential signs of weakness in the labor market.  Jobless claims for last week totaled a seasonally adjusted 242K, up 22K from the previous week's revised level & higher than the estimate for 225K, according to a Labor Dept report.  The level of claims matched the highest since early Oct 2024 & comes amid questions over broader economic growth & worrying signs in recent consumer sentiment surveys.  Pres Trump has been taking aggressive measures to reduce the federal workforce through Elon Musk's Dep of Gov Efficiency advisory board.  The efforts so far have resulted in tens of thousands of jobs cuts & are expected to continue.  In DC, new claims totaled 2K, an increase of 421 (26%) according to numbers not adjusted for seasonal factors.  That is the largest number for the city since Mar 25, 2023, according to Labor Dept  records, & is consistent with a surge that began in early Jan.  However, the claims trend does not appear to be spreading to the surrounding areas.  Virginia & Maryland both saw small declines on the week.  California, which also has a large population of federal gov workers, saw a drop as well.  “This report showed a healthy gain, but not the first ripples of what likely will be a major wave of unemployment claims, both from layoffs in the federal workforce and at companies such as Starbucks and Southwest,” wrote Robert Frick, corp economist at Navy Federal Credit Union.  Continuing claims, which run a week behind, showed a small decrease and stood at 1.86M.  However, the 4-week moving average of claims, which helps smooth out weekly volatility, rose sharply to 224K, an increase of 8500.

Weekly jobless claims jump to 242,000, more than expected in latest sign of economic softening

Nvidia (NVDA), the chipmaker at the center of an AI spending boom, delivered good-but-not-great quarterly numbers, disappointing investors accustomed to blowout results.  Sales will be about $43B in the fiscal first qtr, which runs through Apr, NVDA said.  Analysts had estimated $42.3B with some projections ranging as high as $48B.  The company also warned that gross profit margins would be tighter than anticipated as it rushes to roll out a new chip design called Blackwell.  And there's the risk of US tariffs weighing on results.  The mixed outlook comes at a shaky time for the AI industry.  NVDA shares have dipped this year on concerns that data center operators will slow spending.  Chinese startup DeepSeek also has sparked fears that chatbots can be developed on the cheap, potentially reducing the need for NVDA's powerful chips for AI.  Though NVDA execs addressed most of those issues, it's become harder for the company to produce blockbuster earnings reports.  The company got $11B of revenue from Blackwell in the 4th qtr, something NVDA described as the “fastest product ramp” in its history.  “Demand for Blackwell is amazing,” CEO Jensen Huang said.  Though the company's fiscal 4th-qtr sales topped estimates, they did so by the smallest margin since Feb 2023.  Earnings, meanwhile, had the narrowest amount of upside since Nov 2022.  The stock dropped 9.42 (7%).

Nvidia Sinks After More Subdued Growth Fails to Wow Investors

Mortgage rates fell for a 6th consecutive week to the lowest level in more than 2 months, mortgage buyer Freddie Mac said.  Freddie Mac's latest Primary Mortgage Market Survey, showed that the average rate on the benchmark 30-year fixed mortgage decreased to 6.76% from last week's reading of 6.85% & the average rate on a 30-year loan was 6.94% a year ago.  "The drop in mortgage rates, combined with modestly improving inventory, is an encouraging sign for consumers in the market to buy a home," said Sam Khater, Freddie Mac's chief economist.  The average rate on the 15-year fixed mortgage fell to 5.94% from 6.04% last week.  1 year ago, the rate on the15-year fixed note averaged 6.26%.  Mortgage rates ranged from 6.91% to 7.04% in Jan & the National Association of Realtors (NAR) said that in comparison to 1 year ago, the monthly mortgage payment on a $300K home increased by an extra $50 to $1590.

Mortgage rates fall to lowest level in over 2 months

Gold prices dropped to their lowest level in over 2 weeks as the $ strengthened, with investors waiting for key inflation data that could shed light on the Federal Reserve's monetary policy path.  Spot gold was down 1.1% at $2885 an ounce, after hitting its lowest level since Feb 12 earlier in the session.  Prices hit a record high of $2956 on Mon, driven by safe-haven flows.  US gold futures settled 1.2% lower at $2895.  The direction of gold is very evident & these short-term bumps & profit-taking is just a normal part of the cycle.  The dollar index, opens new tab rose 0.7%, making greenback-priced bullion more expensive for holders of other currencies.  Investors' focus now turns to the US Personal Consumption Expenditures (PCE) index due tomorrow, expected to remain at 0.3%.  Any significant deviation from the estimated PCE data could trigger a negative reaction, based on concerns that the Fed is less likely to lower interest rates.  Markets expect the Fed to deliver at least 2 rate cuts this year, with about 55 basis points of easing priced in for 2025.

Gold hits two-week low with firm dollar, inflation data in focus
 
Oil prices rose more than 2% as supply concerns resurfaced after Pres  Donald Trump revoked a license granted to US oil major Chevron (CVX) opens new tab to operate in Venezuela.  However, investors were still keeping an eye on signs of a potential peace deal in Ukraine, which could result in higher Russian oil flows.  Brent crude oil futures were up $1.53 (2.1%) at $74.06 a barrel & US West Texas Intermediate crude oil futures rose $1.64 (2.4%) to $70.26.  The contracts had settled in the previous session at their lowest levels since Dec 10.  Markets like clarity as opposed to uncertainty.  Unless a clear path is presented on tariffs & Eastern European peace, oil prices will remain on the defensive with sporadic & spontaneous headline-based rallies.  The CVX license revocation means the company will no longer be able to export Venezuelan crude.  And if Venezuelan state oil company PDVSA exports oil previously exported by CVX, US refineries will be unable to buy it because of US sanctions.  CVX exports about 240K barrels per day (bpd) of crude from its Venezuela operations, more than a qtr of the country's entire oil output.

Oil climbs more than 2% after Trump cancels Chevron's Venezuela license

Tech stocks led the major averages lower as NVDA shares sold off following the AI chipmaker's its earnings report & investors took stock of the economy amid Pres Trump's latest tariff pledges.  Investors dug into NVDA's quarterly earnings beat, which signaled plenty of scope for growth as it eased worries about DeepSeek & faltering AI demand.  Meanwhile, more signs emerged of a sluggish US economy.  Data today showed GDP grew at an unrevised 2.3% annualized pace last qtr, confirming a slowdown from the previous qtr.