The stock market experienced a challenging week, with the S&P 500, Nasdaq, and Dow recording their fourth consecutive week of losses. Economic concerns stemming from the ongoing conflict in Iran and rising wholesale inflation contributed to these declines. The S&P 500 dropped 1.5% over the past week, while the Nasdaq and Dow each fell approximately 2%, briefly entering correction territory on Friday before closing higher.
In terms of inflation, the producer price index for February increased by 0.7%, surpassing Dow Jones estimates of a 0.3% rise. Federal Reserve Chair Jerome Powell indicated that inflation rates were not declining as anticipated, further complicated by a rise in oil prices related to the conflict. Brent crude significantly increased by 8.8% last week, affecting consumer gas prices and retailer activity.
Amid these economic factors, Micron’s recent earnings report indicated a severe global memory shortage, despite a strong revenue increase. CEO Sanjay Mehrotra noted that the company cannot meet demand from major customers, limiting supply to roughly 50-66% of requirements. This shortage has negatively impacted hardware companies reliant on memory, including HP, which saw its stock fall to a 52-week low.
In contrast, Apple fared somewhat better, with its shares down less than 9% year to date. Data indicated that Apple gained market share in China, managing memory costs more effectively than competitors who have raised prices due to increasing memory prices.
Nvidia, a key player in the AI chip market, held its annual GTC developers event last week, announcing optimistic revenue projections. Nevertheless, its stock declined by 4% during the week, continuing a downward trend. Analysts remain watchful of Nvidia given its influential role in the AI sector.
Overall, market sentiment remains cautious as the effects of rising inflation and geopolitical tensions continue to weigh on stock performance. Whether this trend will change in the coming week remains uncertain.
Source: Reported based on publicly available information from www.cnbc.com.
