Stock markets closed slightly lower on Monday evening. This negative trend could be the start of accelerated selling pressure ahead. The Nasdaq (QQQ) and S&P 500 (IVV) selling picked up in the last 15 minutes of trade yesterday. Markets reacted quickly to President Trump reiterating plans to impose punitive 25% tariffs against its major trading partners, Canada and Mexico.
Nasdaq’s weakness is especially concerning. Last week, the index traded at fresh all-time highs. In the last three days, selling pressure increased. After two years of not caring about valuations, speculators are now citing rich valuations as unsustainable.
Investors will not need Nvidia (NVDA) to reaffirm its strong sales outlook. AI-related hardware sales continue to increase. Microsoft (MSFT), Meta Platforms (META), and Amazon (AMZN) are the biggest players investing heavily in AI hardware.
Apple (AAPL) took a cautious approach to boosting sales, by announcing a cheaper iPhone 16e model. Historically, budget iPhones are not a blockbuster hit with consumers. Apple fans are more likely to buy the latest iPhone. Content creators opt for the pro model since they have better cameras and video recording capabilities.
On the consumer front, watch Home Depot (HD) today. Its earnings report will give investors insight into consumer spending for home improvement goods. The consumer confidence report this morning will also have an impact on consumer goods stocks.
Investors should continue to hold companies with strong brands, like Coke (KO) and Pepsi (PEP).
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