Nasdaq Slides, Bitcoin Below $80K—Will PCE Data Break Markets Further?

The tech-heavy Nasdaq Composite has been under significant pressure, down about 5.5% in February, with a 7.33% drop in the Nasdaq-100 since its recent all-time high. Nvidia’s 8.5% plunge Thursday, despite strong earnings, is a worrying sign. The sharp decline marked Nvidia’s worst post-earnings performance since 2018, highlighting investor concerns over shrinking profit margins.

Other tech giants are also showing signs of weakness. Dell Technologies fell 1.9% despite solid earnings, as lower-than-expected guidance dampened sentiment. Tesla, down 22% over six days, continues to struggle with declining EV sales and CEO Elon Musk’s controversial politics, which could alienate its traditionally eco-conscious customer base. The broader S&P 500 and Dow Jones are also soft, down 2.5% and 0.4% for the week, respectively.

Will Inflation Data Deliver Another Blow?

Investors are anxiously awaiting the release of the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures (PCE) price index. Expectations are for a 0.3% monthly rise and a 2.5% annual increase. However, if the data comes in hotter than expected, it could reinforce fears of prolonged high inflation and dampen hopes for aggressive rate cuts by the Fed.

A tighter monetary policy stance could hurt equities, particularly growth-oriented tech stocks that are already under pressure. The Fed’s next meeting in mid-March will be critical, and any hawkish signals could add to the bearish outlook.

Tariffs and Treasuries: More Pain Ahead?

President Donald Trump’s renewed tariff threats are adding another layer of uncertainty. Plans for 25% tariffs on imports from Mexico, Canada, and potentially China could disrupt trade and elevate inflationary pressures. The market reaction to these developments has been swift, with investors seeking safety in U.S. Treasuries, pushing yields to three-month lows.

Lower yields typically signal risk aversion and could indicate that institutional investors are positioning for a downturn. The bond market’s caution contrasts sharply with the mild recovery in stock futures, suggesting that equity markets may not fully appreciate the risks ahead.

Is Crypto Heading for a Deeper Correction?

Cryptocurrencies are not immune to the bearish sentiment. Bitcoin fell over 5% to its lowest level since November, dipping below $80,000. The cryptocurrency has lost a quarter of its value since mid-December. The recent $1.5 billion hack of rival cryptocurrency Ether at Bybit added fuel to the fire, further undermining investor confidence.