Market Recap
On Friday, February 22, 2025, the markets closed the week on a down note, with the S&P 500 closing at 6,013.13, a decrease of 1.71%. The NASDAQ followed suit, finishing at 19,524.01, down by 2.2%. The Dow Jones Industrial Average ended at 43,428.02, a drop of 1.69%. The Russell 2000, representing small-cap stocks, lost 2.94%, closing the day at 2,195.35.
This week's markets were largely influenced by President Donald Trump's announcement on Tuesday of a 25% tariff on all steel and aluminum imports. This move, aimed at curbing surging metal imports, has reignited concerns about global trade tensions and strained relations with key US allies, particularly Canada and the European Union. The announcement has already impacted commodity markets, with aluminum prices rising 10% and US copper futures reaching their highest premium over London prices since 2020.
Further escalating trade tensions, Trump proposed 25% tariffs on automobile, semiconductor, and pharmaceutical imports on Wednesday. This move could significantly impact European automakers like Volkswagen and Asian manufacturers such as Hyundai, which account for a substantial portion of U.S. vehicle imports. The global economic repercussions of these tariffs could be significant, particularly for countries with strong auto and semiconductor exports to the U.S., including Mexico, South Korea, and Malaysia.
Despite concerns over uncertain returns, Amazon, Microsoft, Alphabet, and Meta are set to invest over $300 billion in AI infrastructure in 2025, with Amazon leading the charge at more than $100 billion. This surge in spending comes amid a broader tech market sell-off on Friday, where AI-related stocks faced declines: Nvidia dropped 4% to $134.43, AMD fell 3.34% to $110.84, and Broadcom lost 3.58%, closing at $218.66. Meanwhile, Palantir saw a sharp drop of over 5% on Thursday and again on Friday, following reports that the Trump administration plans defense budget cuts. On Friday the stock market had the worst single-day performance in 2025 thus far.
Crypto Recap
The biggest headline that captured the attention of the industry was the unprecedented hack of Bybit, a major cryptocurrency exchange, resulting in the theft of a staggering $1.5 billion in Ethereum. This breach, considered the largest crypto heist in history, compromised Bybit’s cold wallet, leading to the swift transfer and liquidation of primarily ether across multiple wallets and platforms. The attack has been linked to North Korea’s Lazarus Group, a state-sponsored hacking collective known for exploiting security vulnerabilities in the crypto industry.
In other news, Coinbase announced that the SEC has agreed to end the enforcement case against the company, which was initiated in 2023 under former SEC Chair Gary Gensler. The charges against Coinbase included operating an unregistered securities exchange and failing to properly register its crypto staking program. The resolution of this case, without any fines imposed on Coinbase, marks a significant milestone for the company and the broader crypto industry, signaling a potential shift toward regulatory clarity under the current administration.
