CNBC's Fast Money: Stocks Wrap Up Volatile Week… And Dissecting The Tech Wreck (03/07/25)

Released on March 7, 2025

Hosted by Melissa Lee and featuring a panel of top traders, CNBC's "Fast Money" delves into the whirlwind of market movements from the past week, unpacking significant reversals, economic data impacts, trade policy developments, and the tumultuous state of the tech sector. This episode provides investors with actionable insights to navigate the current volatile landscape.

1. Wild Week for Stocks: Major Market Reversal

The episode begins with a recap of a highly volatile week for the stock markets. The S&P 500 experienced substantial fluctuations, dropping over 1% at midday before rebounding to close over half a percent higher. Despite this rebound, the index marked its worst week since September.

Key Factors:

• Economic Data: A weaker-than-expected jobs report showed the U.S. economy adding 151,000 payrolls in February, below the projected 170,000. Unemployment edged higher, and wage growth was sluggish.
• Federal Reserve Commentary: Jerome Powell's remarks provided a turning point, indicating the Federal Reserve's willingness to pause interest rate hikes to assess the impacts of President Trump's aggressive policy actions.

Notable Quote:

Melissa Lee [06:45]: “Midday, the Fed chair said the central bank can wait to see how President Trump's aggressive policy actions play out before it moves again on interest rates.”

2. Trade Wars and Tariff Threats: Escalating Uncertainty

President Trump heightened trade tensions by threatening reciprocal tariffs on Canada and Mexico, criticizing the CHIPS Act as wasteful. This unpredictability added to market nervosity, with traders wary of potential escalations.

Key Insights:

• Market Sentiment: Tim Seymour highlighted, “Markets are still nervous and possibly not buying the bounce. Sentiment remains very, very low.”
• Impact on Tech: The looming tariff uncertainties particularly affect tech stocks, which are sensitive to global trade dynamics.

3. Technical Analysis: Testing the 200-Day Moving Average

The discussion shifted to technical indicators, with a focus on the S&P 500 and Nasdaq indices approaching their critical 200-day moving averages. The Nasdaq closing near this average raised concerns about sustained momentum.

Notable Quote:

Tim Seymour [13:20]: “The Nasdaq today finished really kind of back up near the 200 day. But if you think about where it was intraday… you haven't seen the Nasdaq as an index move to the downside through the 200 day really since March of 2023.”

4. Federal Stimulus and Corporate Spending Shifts

Analysts discussed the transition from fiscal stimulus to corporate spending. With tariffs creating overhangs, capital budgeting has become more challenging, leading to a possible slowdown in corporate investments.

Key Points:

• Valuation Concerns: Fast Money participants noted the market's shift from being "priced to perfection" with high multiples (20-23 times earnings) to facing valuation adjustments due to increased uncertainty.
• Sector Rotation: Expectation of rotation within the tech sector, moving away from mega-cap names towards a wider tech spread.

Notable Quote:

Mike Koh [18:10]: “The uncertainty still continues to loom as a macro overhang.… we're starting to see things roll over.”

5. S&P 500 Rebalancing: New Additions and Removals

Kate Rooney provided updates on changes within the S&P 500, including the addition of companies like Palantir and Intuitive Surgical Service, replacing Dow Inc., Kraft Heinz Co., and Ford Motor Company. These changes are set to take effect on March 24th.

Key Insights:

• Mid Cap Group Adjustments: Doordash and Williams Sonoma were added, while Borg Warner was replaced by Teleflex and Celanese Corp.
• Investor Reactions: Anticipation of these changes affected stock movements, notably Doordash's addition leading to after-hours trading declines.

Notable Quote:

Kate Rooney [35:50]: “All of this is going to be effective March 24th. That is a Monday. It will coincide with some of the quarterly rebalancing.”

6. Costco Earnings: A Defensive Sector Bust

Costco reported earnings that beat revenue expectations with increased same-store sales and robust e-commerce performance. However, despite these positive indicators, the stock plummeted, marking its worst day in a year. The CEO warned that tariffs could squeeze grocery margins.

Key Points:

• Valuation Concerns: Participants expressed skepticism about Costco's high forward multiples, questioning the sustainability of its growth.
• Tariff Insulation: Despite the high valuation, Costco's limited exposure to tariffs (33% of revenues from imports) provides some protection.

Notable Quote:

Mike Koh [42:30]: “The fact is this thing is trading at such a rich forward multiple, it just creates a huge sort of air gap that can exist underneath on any kind of disappointment.”

7. Tech Sector Wreck: Meta's Pullback and Market Choppiness

Meta, after an impressive 20-day winning streak, saw its stock nearly erase all gains, dropping over 15% from its record high. The tech sector continued its decline, marking the third consecutive losing week.

Key Insights:

• VC Adjustments: Rick Heitzman emphasized that venture capitalists are recalibrating expectations, reflecting broader market uncertainties.
• Rebound Prospects: Despite current setbacks, there is optimism for a sustainable rebound as infrastructure investments in AI and digital healthcare remain strong.

Notable Quote:

Rick Heitzman [55:00]: “I think we have the ability for him to back off and put his foot on the gas and if you get some reciprocity, not just reciprocal. If you get some reciprocity from Canada or Mexico…”

8. White House Crypto Summit: Bitcoin's Future

President Trump hosted the first-ever White House Crypto Summit, signaling significant government support for Bitcoin. This development coincided with the establishment of a US Strategic Bitcoin Reserve, aiming to position the US as a leader in digital assets.

Key Points:

• Government Strategy: Matthew Siegel from Vaneck highlighted that this move lowers the risk of government bans on Bitcoin and encourages other nations to create their reserves.
• Market Impact: Despite positive signals, Bitcoin's price remained under pressure, reflecting broader market volatility.

Notable Quote:

Matthew Siegel [1:20:15]: “It significantly lowers the risk of the US Government ever banning bitcoin… establishes Bitcoin in a separate category from other digital assets.”

9. Google Antitrust Case: DOJ's Final Proposal

The Department of Justice (DOJ) filed its final remedy proposal in the Google Search antitrust case, maintaining the core requirement that Google be broken up. While some modifications were made, including allowing AI investments with advanced notification, the directive to sell off Chrome remains.

Key Insights:

• Policy Continuity: Despite the change in administration, the Trump DOJ upheld the Biden DOJ’s stance on breaking up Google.
• Market Reaction: The announcement led to Alphabet’s stock trading at a material discount, disappointing investors hoping for more lenient treatment.

Notable Quote:

Eamon Javers [1:30:50]: “The Department of Justice under Donald Trump is not backing entirely off of that request by the Biden Department of Justice.”

10. Final Market Moves and Closing Thoughts

In the concluding segments, traders discussed potential investment opportunities amidst the volatility. Moderna and McDonald's emerged as stocks worth considering despite broader market declines. Additionally, discussions touched on the global market performance, noting Germany's main index hitting records.

Notable Quotes:

Steve Grasso [1:45:30]: “I think there are people and I believe investors should be really going through their list and their watch list and trying to figure out which names.”

Mike Koh [1:46:10]: “This is a company I'm very familiar with, but I still find that the turn right now is hard to get behind.”

Conclusion

This episode of "Fast Money" encapsulates a week marked by significant market volatility, driven by mixed economic data, escalating trade tensions, and sector-specific upheavals, particularly in technology. The panel emphasized caution, urging investors to navigate the uncertainty with strategic stock selections and awareness of macroeconomic indicators. As the markets brace for upcoming reports and policy decisions, "Fast Money" provides essential insights to aid investors in making informed decisions amidst the dynamic financial landscape.

For more updates and in-depth analysis, visit Fast Money on CNBC.