Yes, it was the kind of week that gives an investor serious heartburn.
The major averages had their worst weeks in some time. In the case of the Standard & Poor’s 500 Index, its 3.1% loss was its worst since the week of Sept. 2, when the index dropped 4.3%.
While the Dow Jones Industrial Average is still up a little (0.61%, to be exact), the S&P 500, Nasdaq Composite Index and the Nasdaq-100 Index have now seen their gains for the year disappear.
The S&P 500 is down 1.9%, and the Nasdaq is off 5.77%.
The Nasdaq-100 took 71 trading days from the Nov. 5 election to reach its record close of 22,175.60 on Feb. 19. That 9.6% gain disappeared in 10 days, and the shares are down 3.9% this year.
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Warren Buffets gets the last laugh
Not even Warren Buffett could get out of the way, Berkshire Hathaway’s class A (BRK.A) shares fell 4.1% on the week at $742.901,.
But here’s where Buffett gets a chance to say, politely, “Told you so.” Berkshire Hathaway shares are still up 11.4% since the election. They’ve risen 9.1% on the year.
The class B (BRK.B) shares, the so-called affordable Berkshire shares, fell 3.5% on the week to $495.62 but, like the pricier A shares, are up 11.4% since the election and 9.1% so far this year.
Mind you, the Oracle of Omaha likes stocks. Buffett said so in his shareholder letter a few weeks ago. But Buffett is a value investor and doesn’t chase fads or hot stocks. His actions said he thought stock prices were too high in 2024 and going into 2025.
So, Berkshire sold billions of dollars of shares, especially Apple (AAPL) . Many, many market pundit ripped Berkshire’s stock sales, said Buffett was missing the boat, was getting too old. (He is 94.) They probably aren’t ripping him now.
More Warren Buffett:
- Buffett’s Berkshire sounds alarm on the 2025 housing market
- Buffett’s Berkshire discloses huge moves in annual report
- Buffett’s Berkshire reveals hidden costs for home buyers
So, what happens next?
A slump is what happens when stocks get overbought. Markets go up, something stops the uptrend, and markets go down until there’s a catalyst to turn things around.
The S&P 500, in fact, dropped just about 10% between July 16, 2024 and Aug. 5, 2024 because of fears a recession was breaking out. The recession just plain didn’t happen. In fact, the index rose 2.3% in August and basically surged into the end of the year.
If you’re looking for a catalyst, consider Jerome Powell, who managed to throw a life buoy to the shell-shocked market last week.
The Federal Reserve Chairman spoke in New York on Friday. As he did at his recent news conference after the latest Fed meeting in February, Powell said the economy is “in a good place.” Labor costs are not currently a source of inflation. Employment is still growing.
He conceded the noisy back-and-forth over trade policy and other policies (especially government job cuts) is stressful and overall uncertainty “remains high.” But it’s not time to panic and start cutting rates, he said. “We do not need to be in a hurry.”
A Friday morning selloff morphed into a rally.
So, it falls to corporate earnings to pick up some slack. And maybe Tesla (TSLA) starts to rebound. The shares are down 45% since their December high and off 35% this year.
The stock has weathered worse losses, such as a 53% decline from a top in the summer of 2023 to an April 2024 bottom.
But last year was all about the company. This year, CEO Elon Musk’s highly visible involvement in the Trump administration make Tesla a lightning rod for anti-Trump sentiment.
Related: Four stocks will join S&P 500 in reshuffling
Oracle has a lot of must-have businesses
So, that brings investors to what’s next. Let’s start with Oracle (ORCL) , which reports after Monday’s close.
Like Musk, Oracle co-founder Larry Ellison is a firm backer of Trump.
But his company seems to be able to operate more or less above the political fray.
Earnings: Due after Monday’s close. Market capitalization: $434 billion as of March 7, 18th in market cap among public companies. Stock price: $155.16, up 0.8% on Friday. Down 6.9% in 2025. Down 9.7% since the Nov. 5 election. Third-quarter earnings estimate: $1.49 a share, up 5.7% from a year ago. Revenue estimate: $14.4 billion, up 8.4%.
Oracle is a giant in database management, with around 160,000 employees world-wide. It is often mentioned as a buyer of social media site TikTok — if, somehow, the Trump administration forces a sale. Congress is concerned TikTok, owned by Chinese interests, is a national security risk.
With 160,000 employees worldwide, the business is firmly focused on the needs of enterprise and government customers. About 25% of its revenue comes from the U.S. Government. Debt is manageable. Free cash flow was 176% of net income in the last fiscal year.
Twenty-three of 36 analysts rate the stock a buy or strong buy. The average price target is $194.84, which would be a 25% gain over Friday’s close.
Adobe reaches customers big and small
Next up is Adobe (ADBE) , whose software has designed everything from newspapers, websites, and magazines to quilt patterns.
Earnings: Due after Wednesday’s close. Market capitalization: $195.4 billion as of March 7, 52nd in market cap among public companies. Stock price: $449.40, up 1% on Friday and 1% for the year. Down 7.6% since the Nov. 5 election. First-quarter earnings estimate: $4.97 a share, up 10.9% from a year ago. Revenue estimate: $5.66 billion, up 9.3%.
Adobe, with 31,000 employees, markets a vast trove of web and graphic design tools and related software. It’s charging into artificial intelligence with its Firefly application. Its products are used by everyone from makers of posters for theater productions and magazine and video production.
It has a solid business with strong levels of annual recurring revenue. Twenty-seven of 40 analysts rate the shares a buy or strong buy. The average price target is $523.26, up 25% from Friday’s close.
Also reporting this week
- Dick’s Sporting Goods (DKS) . Before Tuesday’s open. Earnings estimate is $3.48, down 9.6%.
- Beverage producer Diageo (DEO) before Tuesday’s open. No estimates available. The company has noted that alcoholic beverage sales have been declining. The company is also worried about tariffs on scotch and tequila.
- Cyber security firm Sentinel One (S) . After Wednesday’s close. EPS estimate: -$0.21.
- Digital documents company DocuSign (DOCU) , after the close on Thursday. Earnings estimate: 84 cents, up 10.5%.
- Home builder Lennar (LEN) . Before Friday’s open. Earnings estimate $1.73, down 33%.
- Gold and metals company Wheaton Precious Metals (WPM) . 11 a.m. ET. Earnings estimate 46 cents, up 28%.
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