Market Recap for February 27: Nvidia’s “Perfect” Earnings Ignored, Tech Stocks Plunge and Drag Down Broader Market
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Market Recap for February 27: Nvidia’s “Perfect” Earnings Ignored, Tech Stocks Plunge and Drag Down Broader Market
The second half of the AI revolution is no longer about “belief,” but about “validation.”
Navigating Web3 tides with focused insightsAuthor: TechFlow
Markets delivered a sharp rebuke to Nvidia at Thursday’s close.
The Dow Jones Industrial Average edged up 17 points (+0.03%) to 49,499; the S&P 500 fell 0.54% to 6,909; and the Nasdaq Composite plunged 1.18% to 22,878.
Nvidia tumbled 5.5%, its largest single-day decline since April—even though it had just reported an “even-better-than-expected” earnings result: Q4 revenue of $68.1 billion (vs. $65.6 billion expected), Q1 guidance of $78 billion (vs. $72.6 billion expected), and data center revenue of $62.3 billion (vs. $60.2 billion expected). Every figure was flawless—yet the market refused to buy in.
This isn’t about fundamentals—it’s a crisis of confidence.
The semiconductor sector collapsed across the board: Broadcom fell 7%; Micron, Intel, and Applied Materials dropped 5–7%. The Philadelphia Semiconductor Index (SOX) was nearly decimated.
The market is asking one existential question: Can $700 billion in cloud giants’ capital expenditures truly translate into profits—or is this a collective, arms-race-style frenzy?
Tom Graff, Chief Investment Officer at Facet, stated bluntly: “The market is in ‘show me’ mode—and Nvidia failed to fully deliver.” Investors are beginning to question Nvidia’s transaction arrangements with OpenAI, worrying that such deals may signal a looming ceiling on AI demand.
Software stocks posted a modest rebound—but remain deeply scarred.
During a CNBC interview on Thursday, Jensen Huang defended software stocks: “I think the market is wrong. No one can do better than ServiceNow—they’ll build AI agents deeply optimized for their own tools.”
Salesforce rose slightly by 1.5%, yet the iShares U.S. Technology Software ETF (IGV) has plummeted over 10% in February alone and is down more than 27% year-to-date. The “substitution panic”—fear that AI will displace SaaS—is far from over.
Defensive sectors served as safe havens. IBM surged 3.8%, leading the Dow, after UBS upgraded its rating from “sell” to “neutral,” citing that its recent plunge (down 22% YTD) has already priced in most risks. UnitedHealth rose 2.91%, and American Express gained 2.59%.Crypto Markets: $8.4 Billion in Options Expiring—Bitcoin Struggles Near $67,000
On Thursday, crypto markets entered a holding pattern.
Bitcoin dipped slightly to around $67,044—a roughly 2% drop over 24 hours. Ethereum retreated to $2,012, down 2.3%. Solana fell 3.15% to $85.81, and Cardano declined 3.18%.
This Friday (February 27) at 08:00 UTC, Deribit will see approximately $8.4 billion in Bitcoin and Ethereum options expire—$7.5 billion in Bitcoin options and $900 million in Ethereum options.
Key metrics:
- Bitcoin Max Pain: $75,000
- Ethereum Max Pain: $2,200
- Put/Call Ratio: 0.76–0.78, indicating more call than put open interest
Yet markets aren’t buying the “max pain” theory. Traders are instead focused on downside strike concentrations: large open interest clusters between $60,000 and $50,000 reflect institutional hedging demand against a deep correction.
Historical lesson: During the $23.6 billion Bitcoin options expiry at the end of December last year, max pain was at $96,000—but Bitcoin fell below $88,000. Markets aren’t mechanically drawn to max pain levels.
Options expiries typically unfold in three phases:
- Repositioning in the hours preceding expiry (before 07:30 UTC)
- A 30-minute TWAP settlement window (07:30–08:00 UTC)
- Post-expiry position rollovers
Bitcoin is down 27% year-to-date, having nearly halved from its October high of $126,186—its steepest monthly decline since the Luna/Three Arrows/Celsius collapse in June 2022.
U.S. spot Bitcoin ETFs have seen five consecutive weeks of net outflows, totaling $4.5 billion YTD. Michael Field, strategist at Morningstar: “This doesn’t mean investors have abandoned crypto—but it does suggest Bitcoin has failed to live up to its purported status as a ‘safe-haven asset.’”
One bright spot remains: Circle’s earnings glow lingers.
After Circle’s stock surged 29% on Wednesday, it pulled back slightly on Thursday—but USDC’s circulating supply surpassed $75 billion, capturing 28% market share, continuing to serve as a key pillar of market confidence.Gold & Silver: Technical Correction—Gold at $5,176, Silver at $87.28
Gold rose modestly to $5,176 per ounce, while silver fell 2.15% to $87.28 per ounce.
This is a classic technical profit-taking move: gold had earlier this week hit a three-week high of $5,240, then pulled back under pressure from a strong U.S. dollar and improved risk sentiment.
Silver’s larger decline—from above $90—reflects its greater sensitivity to economic cycles due to its industrial use. Still, silver is up over 150% YTD, vastly outperforming gold.Macro & Geopolitics: PPI Data Due, Iran Nuclear Talks Stalled
At 8:30 a.m. ET Friday, the U.S. will release January’s PPI (Producer Price Index). Markets expect a 0.3% MoM rise (vs. prior 0.5%), and core PPI to rise 0.3% MoM (vs. prior 0.7%).
This is the final major economic data release of the week. An upside PPI surprise would further erode expectations for Federal Reserve rate cuts—the market’s implied probability of a March cut has already fallen from 10% to 5%, and the June cut probability has dropped from 85% to 57%.
The U.S. and Iran resumed indirect nuclear talks in Geneva—but fundamental disagreements persist.
Earlier this week, Trump warned Iran it has “at most 10–15 days” to reach a deal—or face consequences. Ongoing geopolitical tensions have pushed WTI crude oil near $65 per barrel.
Thursday’s initial jobless claims came in at 212,000—slightly above the prior 208,000 but still below the forecast of 215,000, underscoring continued tightness in the labor market.
Friday’s PPI data will set the tone for the week’s closing. If inflation readings again surprise to the upside, tech stocks could face deeper corrections. The second half of the AI revolution is no longer about “faith”—but about “validation.”
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