Trading results for 24 February 2025

Investor uncertainty and concerns over tariffs, rising AI-related spending, and inflation are mounting. The results of Monday’s trading session reflect this unease. After the heavy sell-offs on Thursday and especially Friday, many expected a brief pause, anticipating a possible rebound. Some analysts even began recalling the highly successful strategy of the past decade, Buy the dip, and the first half of the day followed this logic, with a slight recovery after the previous downturn.

On Monday morning, futures on major U.S. indexes showed a modest rise, providing enough optimism for the main trading session to open in the green. However, the bullish momentum was short-lived as the markets quickly lost ground. Indexes slipped back into negative territory, with losses reaching up to 1% for the NASDAQ Composite.

Why focus on NASDAQ? The answer is simple: the main sell-offs hit leading tech stocks, particularly targeting the potential star of the week – chipmaker Nvidia (NVDA, -3.09%), whose earnings report is eagerly awaited by investors worldwide. As a result, Nvidia’s shares set the tone for another wave of sell-offs, dragging the broader market down. Fortunately, the bulls still have enough strength to resist, and a major market collapse has not yet materialised.

Despite this, speculative activity managed to pull the market lower by the end of the session, with all major indexes closing at their daily lows. The Dow Jones Industrial Average (DJIA-30) was the only exception, managing a slight gain of +0.08%, largely thanks to Nike (NKE, +4.94%), whose shares surged nearly 5% after Jefferies raised their target price to $115 – 46% above the current price.

For the broader market indexes, the picture was gloomier. The S&P 500 lost 0.5%, while the NASDAQ Composite fell by over 1% (1.21%). The sell-off primarily affected chipmakers led by Nvidia, along with other tech giants involved in AI projects, such as Palantir Technologies (PLTR, -10.93%), amplifying market losses.

Naturally, this downturn also affected the ITS index family. The ITS World Index (ITSW) declined by 1.08%, while the ITS Shariah Index (ITSS) saw a smaller drop of 0.81%.

Notably, losses in ITSW were not only driven by falling U.S. chip and semiconductor stocks but also by a sell-off in leading Chinese tech companies. The biggest loser here was Alibaba (BABA, -10.23%). In our previous review, we had noted that the recent sharp rise in Alibaba’s share price was likely unsustainable, with the stock appearing significantly overbought. As it turns out, the correction came swiftly – Monday marked the company’s worst trading day in three years, with losses exceeding 10%, and further declines could be on the horizon.

Still, the situation was not entirely bleak, and thanks to strong geographic diversification, losses from Chinese stocks were partially offset by gains elsewhere. Notable winners included Berkshire Hathaway (BRK.B, +4.11%), Chubb Limited (CB, +2.32%) – a leading Swiss property insurer, and a newcomer to the ITSW portfolio, Israeli tech firm Wix.com Ltd (WIX, +2.12%), known for its innovative website-building platform.

The picture for the ITS Shariah Index was particularly interesting. Unsurprisingly, chip stocks like Nvidia and Broadcom (AVGO) ranked among the five worst performers of the day. However, on the opposite end, healthcare stocks continued to shine. In fact, five of the top ten best-performing stocks belonged to the healthcare sector, with Merck & Company (MRK, +1.98%) leading the way, marking its fifth consecutive day of gains.

Nevertheless, market conditions appear to be worsening. The market is slowly but steadily starting to turn downward. For now, this decline remains within the bounds of a technical correction, but the pivotal moment could arrive on Wednesday – the day Nvidia is set to release its quarterly earnings.