Citi encourages buying the dip amid market volatility

In the United States on February 20, 2025, market volatility continues to affect trading dynamics, according to economist Scott Chronert from Citi. During this period, investors faced a 1.9% decline in the S&P 500 following announcements from former President Donald Trump regarding new tariffs on goods imported from Mexico and Canada. However, the market rebounded significantly by the end of the trading session due to the temporary suspension of these tariffs. Moreover, advancements in artificial intelligence, specifically the emergence of the DeepSeek model, contributed to a 1.5% decline earlier on January 27, impacting technology stocks, notably Nvidia. Despite these challenges, Chronert noted a resilience in the market, highlighting a diversification of gains that extends beyond the major players referred to as the 'Magnificent Seven'. These companies, which have historically led to increases in stock prices, currently exhibit a widening influence within the large-cap segment of the market. Notably, only Meta Platforms Inc. from this group has shown significant outperformance, indicating a shift in market leadership dynamics. Chronert maintained a year-end target for the S&P 500 at 6,500 points, suggesting a potential upside of 5.8% from its closing level on the previous day. The economist commented on the modest downside risks stemming from the unfolding Trump administration policies, which could affect future growth projections. However, he remains optimistic that solid economic growth is anticipated to continue into 2026 and beyond, emphasizing the ongoing broadening of market performance. Another significant development on Wall Street included Loop Capital's initiation of coverage on Palantir Technologies with a buy recommendation, forecasting over 25% upside potential. Analyst Mark Schappel expressed confidence in Palantir's position in the market, likening it to leading companies in the software industry such as Adobe and Salesforce, suggesting that Palantir possesses the qualities needed for substantial growth in its sector.