Stock Market Teeters at the Open as Cryptocurrency Surges on Trump’s Endorsement

Markets React to Potential Trade War Developments

U.S. stocks opened the week in a cautious state, fluctuating between gains and losses as investors weighed the possibility of a last-minute resolution to the looming tariff battle. President Donald Trump's proposed 25% tariff on Mexican and Canadian imports, set to take effect on Tuesday, remains a major point of contention in the markets.

Over the weekend, Treasury Secretary Scott Bessent hinted at potential concessions from Mexico, suggesting that the country may be willing to match U.S. tariffs on China to avoid being hit with the new trade penalties. "We’ll see. The Mexican leadership has offered to do that," Bessent said in an interview on CBS' Face The Nation. However, he noted that no similar commitment had yet been made by Canada.

Meanwhile, Commerce Secretary Howard Lutnick stated in a separate interview that the exact level of tariffs on Mexican and Canadian goods remains “fluid,” leaving room for potential reductions before implementation. However, the additional 10% tariff on Chinese imports, also scheduled for Tuesday, appears to be locked in.

Despite concerns that tariffs could fuel inflation, Bessent downplayed the risk, suggesting that China would likely absorb the costs rather than passing them on to consumers.

Stock Market Performance and Investor Sentiment

The ongoing tariff uncertainty has weighed on markets in recent weeks. In February, Wall Street’s three major indexes recorded their first monthly losses of the year, with the Nasdaq suffering a 4% decline—the worst performance since April 2024.

As of 9:55 a.m. ET:

• The S&P 500 dipped 0.064%, or 3.81 points, to 5,950.69.

• The Dow Jones Industrial Average edged up 0.2%, or 86.88 points, to 43,927.79.

• The Nasdaq Composite gained 0.30%, or 56.74 points, to 18,790.54.

• The 10-year Treasury yield inched up to 4.235%, reflecting investor caution over inflation and interest rate expectations.

Market participants are also bracing for key labor market data this week, including the February jobs report on Friday, which could influence Federal Reserve policy decisions in the coming months.

Key Corporate Developments

• Capri Holdings (CPRI) surges on acquisition news – Luxury fashion conglomerate Capri saw its shares jump 6.27% after Bloomberg reported that Prada is set to acquire Versace for nearly $1.6 billion. The move signals further consolidation in the high-end retail sector.

• Intel (INTC) rallies on foundry news – Shares of Intel climbed 3.12% following reports from Reuters that chip giants Nvidia (NVDA) and Broadcom (AVGO) are testing Intel’s advanced 18A chip manufacturing process. If successful, these firms could become major customers for Intel’s semiconductor fabrication business, strengthening its position against Taiwan Semiconductor Manufacturing Company (TSMC).

• Nvidia (NVDA) and Broadcom (AVGO) slip – Despite positive news for Intel, both Nvidia and Broadcom saw their shares fall by approximately 3%, as investors digested the potential impact of Intel's competitive advancements.

• Kroger (KR) tumbles amid leadership turmoil – The grocery chain’s stock slid 1.44% after its CEO was ousted following an internal board investigation into his personal conduct. Leadership uncertainty adds to broader challenges facing the retail sector.

• Defense stocks edge higher – Shares of Raytheon (RTX) and Lockheed Martin (LMT) moved slightly higher following reports that the U.S. government approved a $3 billion arms deal with Israel. Increased geopolitical tensions continue to drive demand for defense stocks.

• Chipotle (CMG) gains on pricing strategy – The burrito chain saw a 2.5% increase in its stock after its CEO reassured investors that the company intends to absorb any additional costs from tariffs rather than passing them onto customers—at least for now.

Trump’s Crypto Endorsement Fuels Volatility

Cryptocurrency markets saw significant movement following a statement from former President Trump on his social media platform Truth Social, where he announced plans to create a “strategic crypto reserve”. The proposed reserve would include leading digital assets such as Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA).

Following the announcement, Bitcoin initially surged but later pulled back, reflecting the high volatility typical of the asset class:

• Bitcoin (BTC) fell 3.46% to $91,059.04, though it remains well above last week’s three-month low of $80,000.

• Other major cryptocurrencies, including Ethereum (ETH) and Solana (SOL), saw similar fluctuations as traders reacted to Trump’s endorsement and broader market uncertainty.

Conclusion

The stock market remains on edge as investors grapple with the potential economic impact of Trump’s tariff policies, ongoing corporate developments, and heightened cryptocurrency volatility. While hopes for a trade resolution persist, uncertainty surrounding tariffs on Mexico, Canada, and China continues to weigh on sentiment.

This week’s labor market data and broader economic indicators will play a crucial role in shaping investor confidence, with market participants closely watching for signals that could influence the Federal Reserve’s next policy moves. Meanwhile, Trump's unexpected embrace of cryptocurrency introduces a new variable into an already unpredictable market landscape.