Volkswacht Bodensee - Stocks slide as US consumer confidence tumbles, tech slumps

The so-called Magnificent Seven stocks -- high-performing and influential US tech firms which dominate the markets -- helped drive US stocks to records at the end of last year -- fell nearly three percent on Tuesday and have now fallen more than 10 percent since their December peak.

The correction in the Magnificent Seven stocks helped drag the tech-heavy Nasdaq Composite index down two percent in morning trading.

The worst hit among them was Tesla, which suffered a nine-percent drop as investors digested disappointing European sales and chief executive Elon Musk's aggressive foray into politics.

"The once mighty tech sector in the US is no more," said Kathleen Brooks, research director at XTB.

She noted that the best performing sectors in 2025 do not include tech, but rather transport, tobacco, healthcare and gold.

Meanwhile shares in Nvidia, whose chips are prized for generative AI applications, fell more than three percent ahead of it releasing results on Wednesday.

Traders will be keenly awaiting its outlook on AI chip sales.

It will be Nvidia's first earnings release since DeepSeek upended the AI industry at the start of this year by unveiling a high-performing chatbot that it said it developed at a fraction of the cost of its Western rivals and with less powerful chips.

That led traders to reassess the massive investments planned by Western AI firms and their stock valuations.

Nvidia's stock fell through its 50-day moving average in trading on Monday.

Meanwhile US consumer confidence in February saw its largest monthly decline since August 2021, deepening a recent slump in optimism in President Donald Trump's second month back in office.

"Consumer confidence continues to come off its election-fueled sugar high from November," said eToro US investment analyst Bret Kenwell.

"Economic uncertainty remains elevated, whether that's around tariffs or more US-centric data like inflation or retail sales," he added.

In recent days Trump has reiterated his intention to slap import tariffs on key US trading partners Canada and Mexico.

Over the weekend he signed a memo calling for curbs on Chinese investments in industries including technology and critical infrastructure, healthcare and energy.

Tariffs would likely cause a surge in inflation, slowing growth and reducing the chances of further interest rate cuts.

Europe's main indices finished mixed after having been solidly higher earlier in the session.

Asian markets ended lower.

Markets were responding to an "unease over looming US tariff policies and their potential ripple effects on global growth and inflation," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

Bitcoin fell back below $90,000 for the first time in a little more than a month as the optimism over expected Trump deregulation for the crypto market ebbs away.

The sector has also been hit by the recent $1.5 billion hack of Dubai-based cryptocurrency exchange Bybit, representing the biggest crypto theft in history, as well as a memecoin scandal in Argentina.

- Key figures around 1630 GMT -

New York - Dow: DOWN 0.2 percent at 43,356.75 points

New York - S&P 500: DOWN 1.1 percent at 5,915.05

New York - Nasdaq Composite: DOWN 2.0 percent at 18,895.04

London - FTSE 100: UP 0.1 percent at 8,668.67 (close)

Paris - CAC 40: DOWN 0.5 at 8,051.07 (close)

Frankfurt - DAX: DOWN less than 0.1 percent at 22,410.27 (close)

Tokyo - Nikkei 225: DOWN 1.4 percent at 38,237.79 (close)

Hong Kong - Hang Seng Index: DOWN 1.3 percent at 23,034.02 (close)

Shanghai - Composite: DOWN 0.8 percent at 3,346.04 (close)

Euro/dollar: UP at $1.0499 from $1.0468 on Monday

Pound/dollar: UP at $1.2651 from $1.2623

Dollar/yen: DOWN at 148.86 from 149.76 yen

Euro/pound: UP at 82.99 pence from 82.91 pence

West Texas Intermediate: DOWN 2.5 percent at $68.94 per barrel

Brent North Sea Crude: DOWN 2.1 percent at $72.50 per barrel

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L.Maurer--VB