Adding to market anxiety, Warren Buffett's Berkshire Hathaway revealed Saturday it had substantially reduced its Apple holdings throughout 2024, while doubling its cash position to $334.2 billion. The dramatic portfolio shift from equities to Treasury Bills by America's most renowned investor has amplified concerns about current market valuations.
The institutional repositioning extends beyond Berkshire, with Federal Reserve Bank of Atlanta President Raphael Bostic noting that recent data points raise questions about whether current market conditions represent "a new trend or just a bump in the road."
Markets now turn their attention to two major catalysts ahead: NVIDIA's highly anticipated earnings report on Wednesday and the Federal Reserve's preferred inflation gauge, the PCE index, due Friday. Analysts expect NVIDIA to report a 63% surge in earnings per share, with revenue projected to jump 73% year-over-year to $38.26 billion. The company's outlook on AI chip demand could significantly impact market sentiment.
Historical market data shows concerning parallels to previous periods when consumer confidence dropped sharply while inflation expectations spiked above 4%. During similar instances, markets experienced significant corrections within the following months.
The convergence of these warning signals comes at a particularly sensitive moment. Beyond NVIDIA's earnings and the PCE data, markets must digest Walmart's recent tariff warnings and UnitedHealth's regulatory probe. Market historians note that when consumer confidence has dropped this sharply while inflation expectations spiked above 4%, the following months have often witnessed dramatic shifts that caught most investors off guard. Monday's opening bell could set the tone for what many analysts now view as a potential inflection point for 2025's market trajectory.