U.S. Markets Tumble Amid Rate Cut Hopes; TSMC's $100B U.S. Investment Boosts Tech

On March 4, 2025, U.S. stock markets closed lower, with the S&P 500 Index down 1.22%, the Dow Jones Industrial Average down 1.55%, and the Nasdaq Composite down 0.35%. Market sentiment was influenced by growing expectations of a Federal Reserve rate cut in May, with traders pricing in over a 50% chance of such a move. This shift in sentiment reflects increasing concerns over the U.S. economy, as the Atlanta Fed's GDPNow model forecasts a 2.8% contraction in U.S. Q1 GDP, suggesting potential economic challenges ahead.

Based on the market performance, the Utilities, Materials, Industrials, Financials, and Consumer Staples sectors underperformed the S&P index.

Taiwan Semiconductor Manufacturing Company (TSMC) surged 4.06% today, driven by its $100 billion U.S. investment. This strategic move bolsters semiconductor supply security and boosts market confidence in the tech sector.

In a day of mixed fortunes on the U.S. stock market, 908 Devices soared by 95.96% following a $70M cash offer from Repligen for its bioprocessing analytics portfolio. Freight Technologies also performed strongly, rising by 53.40% on the back of robust quarterly earnings and promising strategic partnerships. However, Aureus Greenway and NKGen Biotech faced challenging times, with Aureus Greenway dropping by 64.52% amid a regulatory investigation and NKGen Biotech falling by 62.91% due to non-compliance with Nasdaq listing requirements.

Traders are increasingly betting on a Federal Reserve interest rate cut, with more than a 50% chance of a rate reduction in May and expectations of three cuts by 2025. The Atlanta Fed's GDPNow model forecasts a 2.8% contraction in the U.S. economy for Q1 2025, indicating potential challenges ahead. Meanwhile, Microsoft's CFO suggested that AI infrastructure supply and demand would be balanced by the fiscal year's end, reflecting growing interest and investment in AI technologies. Additionally, Bridgewater's Ray Dalio highlighted China's continued leadership over the U.S. in AI chip manufacturing, citing cost advantages and a focus on AI applications like robotics.