SOTS 2nd Hour: Tariffs Countdown, Playing the Tech Tumble, Health of Housing 2/28/25

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Sara Eisen (1:05)

Good Friday morning, welcome to another hour of Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber, live as always from Post 9 of the New York Stock Exchange. Been a tough week for the Bulls, and it is the last trading day of February. It's been a tough month as well. S&P 500 clinging to a little bit of a gain, but if the trend repeats that we've seen all week long, that's been fading already. I mean, for the week, we are sharply lower, especially if you look at the NASDAQ. Week to date, down five and a quarter percent, NASDAQ 100 down five percent. And month to date, the NASDAQ Comp is down 5.7 percent. So the pain has been felt in technology. We have another day where NVIDIA, Microsoft, Apple, Palantir, Meta, Tesla are all weaker. Take a look at Treasuries. It's been a buying of Treasuries kind of moment for the bond market. Seen that in all of February, continues today. Ten-year yield, 4.239 percent. The two-year yield, just about 4 percent. So we're way off that high that we saw in January, remember, we were creeping up toward 4.8 percent, almost to 5 percent on the ten-year, we're down to 4.2. Thirty minutes here into the trading session. Here are three big movers we're watching. Shares of NVIDIA, I mentioned under pressure again, down five of the past six sessions now. The stock going nowhere this month, down more than 10 percent this year and off more than 20 percent from its recent highs. Monster Energy shares moving higher, top of the market today. Earnings were a miss, but revenue beat. Executives on the call pointing to a quote, resurgence of growth in the energy and drink category. Then NetApp, one of the biggest losers right now on the S&P 500, double digits now down after the data storage company's revenue and guidance came in a bit weaker than expected. The big economic report, highly anticipated was PCE, that's the Fed's preferred inflation measure.

The good news is it came in in line with what was expected and also mild, tame. Didn't feed into this narrative that inflation is flaring up again, at least if you look at the Fed core PCE, you take out food and energy, that's what the Fed's been paying attention to. We got a 0.3 percent gain on the month, and then there's the year-over-year figure, and that was good, and as you can see, it's been much lower than it was. It's the lowest annual figure that we saw since 2021 So, Carl, that was a bit of a sigh of relief that we didn't get a hotter number, especially because January was hotter on the PCE, keeps the Fed on hold, doesn't really change anything. I think the bigger swing factor now is what happens with jobs. We're going to get a jobs report next week. There's been some evidence in jobless claims and some of the survey data, jobs market may be cooling off. Venture Pal has said, if we see labor market weakness, we're prepared to cut interest rates. Does that mean they'll go sooner than all the way at the end of the year, which is what the market expected a while ago? Will they go as soon as July maybe now, which is starting to get priced in? That's the question.

Carl Quintanilla (3:55)

Yeah, we watched claims yesterday, three month high, biggest jump in five months. And then anecdotally, the announcements of layoffs from Chevron, Southwest, Starbucks, Metta, Kohl's, Estee Lauder, yesterday, Autodesk, HP. At one point, there's that ad. We're not even talking about federal workers yet.

Sara Eisen (4:15)

The federal workers too, I think is hanging over the market a little bit about how big those cuts are going to be and whether that's gonna take their toll on the economy, what the other doge cuts are going to be ultimately. I mean, we did get some spending numbers and the personal spending numbers that were also weak, down 0.2 percent. Inflation adjusted down 0.5 percent month over month. So maybe some concern around the consumer spending, although Diane Squawk, the economist made the point last hour that there were winter storms in the south, so this could always be weather related. We'll continue to see what we get. Nobody's talking about recession or anything like that, slowing down.