Los tres principales índices de EE. UU. retroceden colectivamente, aumentando la presión sobre la reparación de la valoración de las acciones tecnológicas

Beijing time, the evening of February 27, the U.S. stock market experienced a significant correction. The three major indices all declined, with the technology sector under the most pressure, while defensive sectors were relatively resilient, signaling a clear style rotation in the market. Behind this adjustment are both better-than-expected economic data and multiple policy uncertainties.

All indices under pressure, technology leads the decline

The Dow Jones Industrial Average fell 1.05%, closing at 48,977 points. It was under pressure from the start of the trading day, continuously declining throughout the day amid volatility, with the decline widening near the close. The S&P 500 index declined more mildly, down 0.43% to 6,878 points, briefly turning positive during the session but falling back at the end. The Nasdaq led the decline, dropping 0.92% to 22,668 points, with high-flying sectors like AI chips showing the weakest performance. After a deep sell-off in the morning, there was some rebound, but it weakened again in the afternoon.

From the index performance, the larger decline in the Nasdaq reflects a more intense correction in the tech sector, while the divergence between the Dow and S&P indicates a significant internal structural change in the market.

Economic data surpass expectations, rate cut expectations sharply shift

The U.S. January PPI data was a key trigger for this round of correction. The overall annual rate was 2.9%, higher than the market expectation of 2.6%; the core annual rate was 3.6%, also exceeding the expected 3.0%. This better-than-expected data directly impacted market expectations for a rate cut by the Federal Reserve.

The chain reaction is that the probability of a rate cut at the March meeting has almost fallen to zero, and the rate cut expectations for May have been significantly lowered. Meanwhile, U.S. Treasury yields are rising, and the dollar is strengthening, putting direct pressure on high-valued tech stocks—higher interest rates mean discounted future cash flows for these companies decrease.

Last week, initial jobless claims were 212,000, below market expectations, indicating the U.S. labor market remains relatively tight. The resilience of the employment market combined with sticky inflation has created a dilemma for the Fed. Recent hawkish statements by Fed officials further reinforce this outlook—limited rate cuts this year, and even the possibility of further hikes if inflation rebounds.

Nvidia’s earnings good news exhausted, high-valuation stocks face valuation correction

Nvidia’s earnings report was impressive technically—revenue grew 73% year-over-year, and guidance exceeded market expectations. However, market reaction was contrary. Nvidia’s stock plummeted 5.46%, marking the largest single-day decline in nearly 11 months.

The logic behind this “good news selling” warrants deep analysis. On one hand, it is a realization of high-position chips, as investors take profits accumulated during the AI boom. On the other hand, the market is re-evaluating the valuation levels of AI stocks, worried about whether AI demand growth has peaked and whether these companies’ profit growth can match their sky-high P/E ratios. This shift in sentiment has catalyzed capital flow from high-valuation tech stocks to defensive and undervalued sectors.

Financial sector under pressure, policy uncertainties worsen

Financial stocks also faced pressure, partly due to adjustments in interest rate expectations—lower expectations for rate cuts imply a potentially sustained high-interest environment, which has complex effects on banks’ net interest margins. More importantly, policy uncertainties have increased.

The U.S. government plans to raise the temporary 10% tariffs applied to most countries to 15%, except for China. Meanwhile, the U.S. Supreme Court ruled that the previous administration’s large-scale tariffs exceeded legal authority, raising legal questions about the legitimacy of current tariff policies. The conflict between policy and law adds extra uncertainty to the financial markets, making financial stocks one of the biggest victims of this correction.

Core market drivers: from panic to rational adjustment

This correction in U.S. stocks is not a market-wide crash but a valuation correction mainly driven by inflation and interest rate expectations in high-valuation sectors. The unexpected PPI data cooled expectations for rate cuts and pushed yields higher, directly impacting high-valuation tech stocks that rely on low interest rates. Nvidia’s “good news exhausted” further accelerated this process, signaling capital withdrawal from AI high-flyers. Meanwhile, the dual impact of interest rate and policy uncertainties also put pressure on the financial sector.

The relative resilience of defensive sectors reflects a style shift among investors in the face of uncertainty—from seeking growth in tech stocks to pursuing stable income assets. This is a rational market response, not panic selling.

In the short term, the core contradiction in the U.S. stock market remains between sticky inflation and rate cut expectations. Before the March Fed meeting, the market will continue to oscillate within this contradiction. Investors should closely monitor inflation data and Fed officials’ statements, which will be key factors in judging the future direction of the market.