Macro Events & News
Another challenging week for the market as trade tensions and employment data continued to weigh on sentiment. Inflation concerns remain elevated, with the Trump administration enacting tariffs and threatening reciprocal measures, adding to market uncertainty. The administration’s inconsistent stance on trade further complicates decision-making for businesses looking to mitigate the impact. Additionally, strict immigration policies and enforcement could drive up costs in the short to medium term, exacerbating inflationary pressures. Investors appear hesitant, staying on the sidelines until a clearer outlook emerges.
High-growth tech stocks saw a sharp pullback, with the sector declining around 4% for the week and the Nasdaq now down 10% from its recent highs—officially entering correction territory. However, this seems more like profit-taking rather than a sector rotation, as other indexes and sectors also experienced declines. Given tech’s strong outperformance in prior months, the pullback should be expected. Meanwhile, the continued weakening of the U.S. dollar may help alleviate some FX-related concerns that global companies have flagged during earnings calls.
The 10-year Treasury yield edged higher to 4.3%, while the VIX spiked to 23.37 as escalating trade tensions and economic indicators pointed to potential contraction.
All the major indexes ended significantly lower for the week: the Dow down 2.3%, the S&P 500 down 3.1%, and the Nasdaq down 3.4%.
Watchlist News
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Adobe Inc (NASDAQ:ADBE) showed resilience in an otherwise challenging week, closing in positive territory despite broader market weakness and a sell-off among its peers. Notably, downward price target adjustments from RBC Capital and Wells Fargo had little impact on its performance, indicating strong investor confidence in the stock at these levels.
august bear notes
Adobe held firm despite broader tech sector weakness, finding support at key technical levels following its sharp Q4 earnings sell-off in December. With Q1 earnings approaching on Wednesday, March 12, the stock remains a risky hold given its history. While Adobe dominates its space and boasts impressive margins, its management team has often underwhelmed with decisions that focus on profits rather customer experience. The CEO also has a tendency to sandbag guidance for easier future beats.
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NVIDIA (NASDAQ:NVDA) faced headwinds this week, driven by negative sentiment in the sector including weakness in Marvell’s earnings and a broad semiconductor sell-off following the Trump administration’s statement that it may not honor U.S. CHIPS Act commitments. However, strong earnings from Broadcom late in the week helped offset some of the negative pressure.
august bear notes
The macro environment remains unstable, with the Trump administration constantly shifting its stance on tariffs and now signaling that it may not honor financial commitments under the U.S. CHIPS Act. While NVIDIA was not a primary beneficiary of the legislation, the industry-wide expansion it supported would have been a tailwind. The timing of these disruptions is unfortunate, and with new uncertainties emerging weekly from the administration, it’s unclear when stability will return. However, NVIDIA’s core thesis remains intact, as do the underlying demand drivers and strong financial metrics.
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Micron (NASDAQ:MU) was caught in the broader semiconductor sell-off this week but managed a late-week rebound, likely driven by a regulatory filing from SK Hynix highlighting strong demand. Despite closing the week lower, Micron held up better than many of its industry peers.
august bear notes
Micron appears to have solid support at the $88-$89 level, at least leading into its earnings report on Thursday, March 20. Like the broader semiconductor sector, it remains under pressure from ongoing tariff uncertainty and the potential rollback of US CHIPS Act commitments. Macro factors such as inflation and signs of economic contraction add to the volatility. However, despite his rhetoric, President Trump does pay attention to market reactions, and his quick delay to the Canada and Mexico tariffs suggests he may adjust his approach if the sell-off continues. Any policy softening would be a positive for Micron and the sector as a whole.
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Taiwan Semiconductor (NYSE:TSM) closed the week lower despite announcing a $100 billion commitment to expanding its U.S. production capacity to meet strong demand. The stock faced negative pressure, largely due to uncertainty surrounding the US CHIPS Act, from which TSMC had received over $6 billion—some of which was allocated to its Phoenix plant construction.
august bear notes
The early-week bounce was a positive sign, reinforced by TSMC’s announcement of a major future investment in the United States. While the company claims this move wasn’t politically driven, the timing—amid escalating tariff discussions—suggests otherwise. Aligning with President Trump has historically been beneficial, as his focus tends to be on immediate headlines rather than corporations following through on commitments. The potential rollback of US CHIPS Act funding shouldn’t be a concern for TSMC since its allocation has already been secured, but the broader uncertainty weighs on the semiconductor sector. Once these politically motivated headwinds subside, TSMC has significant upside potential given the insatiable demand for its products and the lack of viable competitors.
