On Monday, February 26, investors prepare for a busy data week, with European and American stock markets initially falling as a mark of respect. The market has repeatedly delayed expectations for a Fed rate cut, with the dollar strong, oil prices continuing to decline, and Japanese stocks closing at a new historical high.

This week, the U.S. will receive key economic data, including the revised value of the fourth-quarter real GDP and January PCE. If the U.S. economy accelerates again and inflation remains sticky, then the Federal Reserve will once again lose its reason for cutting interest rates.

The seven major tech stocks, including Microsoft, Apple, Nvidia, Google's parent company Alphabet, Amazon, Facebook's parent company Meta, and Tesla, showed mixed results. In early trading, Tesla rose over 3%, Nvidia initially rose over 2% then gave back more than half of its gains, potentially setting a new closing high for the third consecutive trading day, while Alphabet fell over 2% in early trading, with Apple and Meta falling about 0.5%, and Microsoft and Amazon slightly turning negative.

Chinese concept stocks overall outperformed the broader market, with the Nasdaq Golden Dragon China Index (HXC) initially rising over 1%. Li Auto, which doubled its revenue in the fourth quarter and achieved annual profitability for the first time, opened with a surge of over 10%. Two other new energy vehicle makers also saw gains, with Xpeng Motors initially rising over 9% and NIO rising over 6%. Among other stocks, Kingsoft Cloud initially rose over 5%, Bilibili rose over 1%, Alibaba slightly turned positive, while Pinduoduo fell over 3%, NetEase fell more than 1%, Baidu fell less than 1%, and JD.com slightly declined.

The three major U.S. stock indexes collectively opened slightly higher and rose in early trading



The S&P 500 sectors saw mixed performance, with utilities leading the losses by falling over 1% at the open, while consumer discretionary led the gains


Berkshire Hathaway, led by Buffett and which reported earnings last weekend, opened up over 3%, setting a new intraday all-time high.



European and American stock markets continue to decline, with the Europe Stoxx 50 index down 0.16%, Germany's DAX index down 0.3, Nasdaq 100 index futures down 0.02%, S&P 500 index futures down 0.06%, and Dow Jones index futures down 0.07%

Following last week's Nikkei 225 index breaking the record set before the 1989 financial bubble burst, Japanese stocks are now poised to break through the 40,000-point barrier. On Monday, the Nikkei 225 index rose 0.74% at one point to 39,388.08, setting a new historical high; by the close, it was up 0.35% at 39,233.71, continuing to set new historical closing highs.

Last week, the Japanese yen continued its eight-week decline against the US dollar, marking the longest continuous downward streak since October 2022. Today, the yen faced further pressure, now at 150.42. Stephen Innes from SPI Asset Management mentioned that the yen's weakness is one of the factors attracting many foreign investors to buy Japanese stocks.

Buffett's endorsement also played a part behind the consecutive new highs of Japanese stocks, with the weekend disclosure of the latest earnings report and annual letter to shareholders (including a collection of letters from previous years). In the letter, Buffett talked extensively about Japanese companies, stating that Berkshire Hathaway will indefinitely maintain its investment in five Japanese trading houses. Currently, Berkshire has increased its stake in each company to about 9% and has promised not to purchase shares that would make its holdings exceed 9.9%.

In South Korea, the Kospi index initially fell 1.4% due to financial regulators planning to promote improvements in management and corporate governance among listed companies, but some investors think the plan lacks details, leading to a narrowing of losses later on.

European stocks were dragged down by mining stocks, with the Europe Stoxx 50 index down 0.2%, the German DAX index flat, the UK's FTSE 100 index down 0.01%, and the French CAC 40 index down 0.38%. Mining stocks led the Stoxx Europe 600 index lower from its record close on Friday, with Rio Tinto Group and Glencore leading the basic resources sector lower.

US stock futures were lower after multiple Federal Reserve officials issued "hawkish" warnings last week, cautioning that inflation needs to fall further and that cutting rates too quickly could undo anti-inflation efforts.

Goldman Sachs downgraded its rate cut forecast for the second time in a month, and the market has postponed its rate cut expectations. Over the past month, investors halved the number of rate cuts they expect the Federal Reserve to make in 2024.

In individual stocks, Li Auto's Q4 revenue doubled, and profits increased 20-fold, with its pre-market shares up over 7%.

NIO's pre-market shares rose over 2%, with recent news of a downgrade in rating and target price by JPMorgan from $8.50 to $5, advising investors to sell NIO amid new model launches by competitors potentially dragging on sales.

Tesla's pre-market shares slightly fell, as the company again showcased the walking ability of its second-generation humanoid robot, Optimus, more stable and smooth.

Berkshire Hathaway's Class B shares' pre-market gains widened to 6% at one point, with Q4 net profit doubling year-over-year, investment gains near $30 billion, and a record cash reserve of $167.6 billion.

Oil prices tumbled as postponed rate cut expectations boosted the dollar, increasing the cost of buying oil and decreasing demand, leading to further declines in oil prices. At the time of writing, Brent crude futures were down 45 cents, a 0.56% decrease, at $80.35 per barrel. WTI crude was down 44 cents, a 0.3% decrease, at $76.05 per barrel.

Analysts believe the main reasons for the plunge in oil prices are: US inflation data showing economic resilience, the Federal Reserve's rate cut timetable being up in the air, postponed rate cut expectations boosting the dollar, increased market buying costs, decreased crude oil demand, leading to a drop in oil prices.

Since November last year, oil prices have been fluctuating between $70 and $90 per barrel. Various forces in the oil market have been balancing each other out. For example, increased US crude production has put supply pressure, leading to lower oil prices. At the same time, OPEC+ has been boosting oil prices by reducing market supply. Conflicts in Ukraine and Israel, as well as the Red Sea crisis, have added geopolitical risks leading to higher oil prices.