Stocks Pressured by AI Concerns and Geopolitical Risks

Economic Indicators - Q4 GDP is expected to expand by +3.0% (q/q annualized) and the Q4 core price index is expected to climb by +2.6% [1] - December personal spending is expected to rise by +0.4% m/m and personal income is expected to be up +0.3% m/m [1] - The December core PCE price index is expected to increase by +0.3% m/m and +2.9% y/y [1] - The February S&P manufacturing PMI is expected to slip by -0.1 to 52.3 [1] - The December trade deficit was -$70.3 billion, wider than expectations of -$55.5 billion [2] - The February Philadelphia business outlook survey unexpectedly rose +3.7 to a 5-month high of 16.3 [2][3] - Weekly initial unemployment claims fell -23,000 to a 5-week low of 206,000, indicating a stronger labor market [2][3] Stock Market Performance - Stock indexes are under pressure, with the S&P 500 down -0.26%, Dow Jones down -0.28%, and Nasdaq down -0.34% [6] - Chipmakers and AI-infrastructure stocks are leading losses, with significant declines in companies like Seagate Technology and Microchip Technology [12] - EPAM Systems is down more than -21% after forecasting weaker-than-expected revenue growth [13] - Avis Budget Group is down more than -20% after forecasting lower adjusted EBITDA than consensus [13] - Pool Corp is down more than -13% after reporting Q4 adjusted RPS below consensus [14] Earnings Reports - More than three-quarters of S&P 500 companies have reported earnings, with 75% beating expectations [7] - S&P earnings growth is expected to climb by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth [7] - Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6% [7] - Omnicom Group is up more than +13% after reporting Q4 revenue well above consensus [15] - Deere & Co is up more than +11% after raising its full-year net income forecast [16]