Markets Daily: Animal spirits in retreat

Market data as of 06:36 am EST. Market data may be delayed depending on provider agreements. Bitcoin extended a selloff, losing 6% to trade

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Markets Snapshot S&P 500 Futures 5,898 +0.37% Nasdaq 100 Futures 20,669.25 +0.31% US 10-Year Treasury Yield 4.256% -0.004 Bitcoin 80,490.06 -4.50% Stoxx Europe 600 Index 555.44 -0.30% Market data as of 06:36 am EST. View or Create your Watchlist Market data may be delayed depending on provider agreements.

Five things you need to know

Bitcoin extended a selloff, losing 6% to trade near $79,000. The token has lost more than 25% since hitting an all-time high amid a broad plunge in cryptocurrencies, with Ether, Polkadot and XRP all dropping more than 7% on Friday. Asian stocks tumbled as China warned it would hit back at US trade threats after President Donald Trump unveiled additional tariffs on imports. An index of Chinese shares listed in Hong Kong sank 3.6%, the most since October. Meanwhile, US stock futures gained ahead of data on personal income and consumption. A reversal of the S&P 500's post-election rally would spark investor expectations for Trump to intervene and support the market, wrote Bank of America strategists. The SEC expressed concern about a private credit ETF that was launched this week by State Street and Apollo under the ticker "PRIV." The regulator has concerns over the fund's liquidity, its name and its ability to comply with valuation rules, according to the letter.  Japan's financial regulator plans a sweeping crackdown on $67 billion of high-yield loans backed by government bonds and other assets that have gained popularity among regional banks even after officials warned about their risks.

Fear replaces greed

The shortest month is ending with long faces among those investors who had hoped 2025 would reward risk-taking. As fear replaces greed across trading desks, the S&P 500 is now down for the year. On the flip side, Treasuries have extended their best start to a year since 2020. Animal spirits are also in retreat in crypto, and stocks in Asia and Europe had rocky days.  A popular exchange-traded fund tracking long-dated Treasuries is on course to notch a 4% rally this month, while a similar product for broad equities is down almost 3%. That's the biggest divergence in favor of debt — the ultimate haven during moments of economic concern since March 2020. Treasuries don't often enjoy such a strong start — 2008, 2016 and 2020 were the only better initial rallies this century. That's unnerving for assets that do well in expanding economies — even if 2016 and 2020 ultimately delivered annual gains for the S&P 500 they were also very volatile times. It wasn't supposed to be this way. Trump returned to power just over a month ago amid hopes on Wall Street that his focus on tax cuts, tariffs and deregulation would deliver reflationary and inflationary impulses that would be bad for fixed-income and mostly good for equities. Instead, signs the US economy is slowing have dovetailed with the idea that tariffs could end up hurting growth more than lifting inflation. Citigroup's gauge of when economic data beats forecasts is at its lowest since September, while Trump said the 25% tariffs on Canada and Mexico would come into force from March 4 and added that Chinese imports face a further 10% levy. Speculation that the AI boom is failing to live up to the hype is also worrying some investors after Nvidia's results disappointed. Meanwhile, bonds have rallied on Treasury Secretary Scott Bessent's ambition to get 10-year yields lower and some like the sound of Elon Musk's campaign to rein in Washington spending. The demand for safety was enough to overwhelm the hawkish talk from Fed officials still focusing on sticky inflation. "Markets have undergone a bit of a 'growth scare,'" said Michael Brown, senior research strategist at Pepperstone. "For the time being, I remain bullish equities, albeit with the path to the upside likely continuing to prove a bumpy one." — Simon Kennedy, Lu Wang, Garfield Reynolds and Paul Dobson

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On the move

HP falls 4% after its profit outlook fell short of expectations because of rising costs and tariffs on goods from China. Autodesk rises 1.5%. The software company plans to cut about 1,350 employees as part of a broader focus on profitability following pressure from investors including activist Starboard Value. It also reported results that beat expectations.  Monster Beverage rises 2.1% after profit margin topped estimates.  International Airlines Group climbs 4.8% in London, its biggest jump since November. The British Airways owner reported earnings that showed a strong end to the year and announced a share buyback of up to €1 billion. Logitech drops 9% in Zurich, the most since March last year. Bank of America cut its rating on the stock to underperform, citing valuation and earnings outlook.  —Subrat Patnaik

Russia bets are back

With speculation swirling that a re-opening of Russian financial markets is perhaps just weeks away, investors are rushing to buy assets with any link to Moscow. They're turning to the Hong Kong market and snapping up shares listed there of United Co. Rusal International, the Moscow-based aluminum giant, at such a fast clip the price has jumped some 75% this month. In Vienna, they've bid up shares of Raiffeisen Bank, an Austrian bank with a Moscow-based subsidiary, by 35% this year; and in Budapest, they've sent OTP Bank, which still has operations in Russia, up 11%. It's the same in currency markets. Kazakhstan, a major Russian trading partner, has seen the tenge strengthen about 4% this month, one of the biggest increases among currencies around the world. In midtown Manhattan, securities lawyer Grigory Marinichev has been fielding calls from clients asking how to trade Russian markets, which are still frozen under US sanctions. "They want to be the first ones in the trade," said Marinichev, a partner at Morgan, Lewis & Bockius in New York. "But for now, there is not much we can tell them other than to follow the news." — Sujata Rao, Natasha Doff and Lynn Thomasson

Tesla's tumble

As a rout in Tesla's stock goes from bad to worse, some investors are bracing for more downside ahead. The shares are down about 40% from their late 2024 high, a reversal that accelerated in recent days after data showed Tesla's European car sales nearly halved in January. This week's roughly 17% decline in the share price suggests the slowdown in Tesla's mainstay auto business is starting to unnerve traders. That's bad news for a stock whose fortunes have been driven by investor enthusiasm as much as fundamentals. "The real difficulty with any stock that is as richly valued as Tesla is to be able to call a floor," said Steve Sosnick, chief strategist at Interactive Brokers. —Esha Dey

Word from Wall Street "Sell a kidney if you must, but keep the Bitcoin." Michael Saylor  Co-founder and Chairman of Strategy Click here to see the post on X.

One number to start your day 537,000 That's how many 401(k) accounts have balances of $1 million or more at Fidelity Investments

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