February Was Tough for Tech, But Nasdaq Ended on a High Note
February was a bruiser for tech stocks, but the Nasdaq composite ended on a high note — up 1.6% on Friday, closing at 18,847.28. That was enough to stop the bleeding but not erase the damage. The index still closed the month down 4%, its worst performance since April 2024, as investors wrestled with rising Treasury yields, high valuations, and shifting Federal Reserve expectations.
Cooling Inflation and Falling Yields Ease Market Tensions
The market found relief in signs of cooling inflation and weaker consumer spending, which pushed Treasury yields lower. That was enough to reignite hopes that the Federal Reserve might hold off on further rate hikes, giving tech stocks a much-needed breather.
U.S. PCE Inflation Data (January 2025)
| Indicator | Actual | Previous | Consensus |
|---|---|---|---|
| PCE Price Index (MoM) | 0.3% | 0.2% | 0.3% |
| PCE Price Index (YoY) | 2.5% | 2.6% | 2.5% |
| Core PCE Price Index (MoM) | 0.3% | 0.2% | 0.3% |
| Core PCE Price Index (YoY) | 2.6% | 2.9% | 2.6% |
Tech Stocks Attempt to Regain Their Footing
Nvidia (NVDA) Rebounds After AI-Led Selloff
Nvidia bounced 3.9%, clawing back some ground after an 8.5% plunge on Thursday. Despite delivering strong earnings, investors have started questioning whether AI demand is cooling, especially with rival chipmakers ramping up production.
Friday’s rebound suggests some traders saw the selloff as overdone, but the options market pointed to hedging activity rather than outright bullish conviction. Nvidia’s valuation remains stretched, meaning volatility is far from over.
Tesla (TSLA) Snaps Its Losing Streak — But Challenges Remain
Tesla gained 3.9% to close at $292.98, breaking a six-day losing streak. While that’s a welcome bounce, the stock is still 40% below its December 2024 high of $488.54.
The EV sector remains under pressure, with Chinese demand softening and competition intensifying. Trading volume on Friday was elevated, suggesting this was more of a technical rebound than a sign of renewed confidence.
Market Snapshot: Tech’s Struggles Define February
Despite Friday’s rally, tech stocks remain under pressure:
- Nasdaq ended the week down 3.5%, capping off a turbulent month.
- S&P 500 slipped 1%, as broader economic uncertainty lingered.
- Dow Jones Industrial Average eked out a 1% gain, with investors rotating into more defensive names.
Source: AP
Tech has been at the centre of the market’s pullback, as traders reassess whether recent rate cut optimism was premature.
March: A Make-or-Break Month for Tech
With inflation showing early signs of moderation, the real question is whether the market can stabilise, or if another wave of selling is around the corner.
If economic data continues to support a Federal Reserve pause, tech stocks could see some recovery. But if inflation surprises to the upside, rate expectations could shift again, pulling the Nasdaq lower once more.
One thing’s clear: February’s selloff wasn’t just a blip, it was a reality check for a market that had been pricing in too much optimism, too soon. March will tell us whether that recalibration is over — or just getting started.
