7 Bearish Signs - Selloff or Beginning of Mid-Term Bear Market?
A look at 5 ETF to keep an eye on. With Signal (Premium only)
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Current Market Status
U.S. stock markets entered this week on shaky ground following a steep decline last Friday, with the Dow Jones Industrial Average recording its worst weekly performance since October 2024. As of Tuesday, February 25, 2025:
The S&P 500 is attempting to snap a three-day losing streak after falling 0.5% on Monday, bringing it to 5,983.25 points
The Dow Jones Industrial Average added a modest 33.19 points (0.1%) on Monday to reach 43,461.21
The tech-heavy Nasdaq Composite fell 1.2% on Monday, losing 237.08 points to close at 19,286.92
The Nasdaq has now turned negative for 2025, erasing all gains made earlier in the year
The CBOE Volatility Index (VIX), often referred to as the "fear gauge," rose 16.28% to 18.21 last Friday, indicating heightened market anxiety
Monday's trading showed mixed results with futures tied to major indices showing slight gains of approximately 0.1% in after-hours trading, suggesting potential stabilization attempts.
Technology Sector Performance
The technology sector has been particularly hard hit in recent sessions:
Technology Select Sector SPDR (XLK) declined 2.7% last Friday
Nvidia shares slipped 0.6% on Tuesday and are down 3.5% year-to-date ahead of their crucial earnings report scheduled for Wednesday
Palantir, focused on defense technology and AI, plummeted more than 10% on Monday, continuing its decline from last week
Microsoft dropped 1% following a TD Cowen report indicating reduced investments in data centers
Other tech giants showed mixed performance in premarket trading on Monday:
Tesla gained about 2% after significant declines in previous sessions
Microsoft, Alphabet, Amazon, Meta Platforms, and Broadcom all gained ground
Apple dropped 0.7% after announcing plans to invest more than $500 billion in the U.S. over the next four years
Economic Indicators and Data
Several key economic indicators are influencing market sentiment this week:
Consumer confidence data from the Conference Board is expected to register at 102.1 for February, down from January's 104.1
The University of Michigan's consumer sentiment index dropped to 64.7 in February, a decline of almost 10 percentage points from the prior month and significantly below analysts' expectations
Manufacturing activity grew slower than expected in January
U.S. services purchasing managers' index dropped to 51.6, below economists' expectations of 52.8
Services PMI fell into contraction territory at 49.7, its lowest level in more than two years
Five-year inflation outlook rose to 3.5%, the highest level since 1995
The Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation measure, is scheduled for release this week
7 Warning Signs
The recent market downturn shows increasingly concerning signals that this may be more than a typical correction. Major indices have now experienced multiple consecutive days of declines, with the S&P 500 falling for a fourth straight day and the Nasdaq turning negative for 2025.
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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.