U.S. stocks closed higher on Friday to wrap up a volatile week and a losing month for the major averages amid a negative mix of news related to tariffs, inflation and the economy.
The S&P 500 declined roughly 1% for the week and 1.4% in February. The tech-heavy Nasdaq Composite lost about 4% for all of February, its worst monthly decline since April 2024. Meanwhile, the blue-chip Dow Jones Industrial Average managed to outperform, rising about 1% during the week. Month-to-date, however, the 30-stock index dropped 1.6%.
Source: Investing.com
The week ahead is expected to be another eventful one as investors react to President Donald Trump’s aggressive tariffs. Trump’s 25% tariffs against Canada and Mexico will start on Tuesday, along with a further 10% tariff hike on Chinese goods.
Most important on the calendar will be Friday’s U.S. employment report for February, which is forecast to show the economy added 156,000 positions. The unemployment rate is seen holding steady at 4.0%. That will be accompanied by a heavy slate of Fed speakers, including Chairman Jerome Powell.
Source: Investing.com
And while the earnings season is drawing to a close, a number of noteworthy reports are due, including Broadcom (NASDAQ:AVGO), CrowdStrike (NASDAQ:CRWD), Costco (NASDAQ:COST), Target (NYSE:TGT), Best Buy (NYSE:BBY), Macy’s (NYSE:M), Kroger (NYSE:KR), and JD.com (NASDAQ:JD).
Regardless of which direction the market goes, below I highlight one stock likely to be in demand and another which could see fresh downside. Remember though, my timeframe is just for the week ahead, Monday, March 3 – Friday, March 7.
Costco, the Issaquah, Washington-based warehouse retailer, is poised to deliver its fiscal second-quarter earnings after the U.S. market closes on Thursday at 4:15PM ET. According to the options market, traders are pricing in a swing of 4.4% in either direction for COST stock following the print.
Recent optimism has been evident, with profit estimates revised upward 15 times in the weeks leading up to the report—compared to only five downward revisions, according to InvestingPro.
Source: InvestingPro
Despite the economic headwinds affecting retailers, Costco seems set to beat expectations as the membership-based warehouse club benefits from a shift toward frugal consumer spending amid the current economic backdrop.
Analysts project that Costco will earn $4.08 per share, representing a 4.1% increase from last year’s EPS of $3.92. Furthermore, revenue is forecast to climb 9.9% year-over-year to $63 billion, driven by strong grocery sales and favorable membership trends.
These encouraging signals suggest that Costco’s disciplined business model, loyal customer base, and robust membership program continue to generate resilience and growth even in uncertain times.
Known for its wide array of high-demand products—from groceries and household essentials to electronics and apparel—Costco has managed to carve out a niche for itself by catering to value-conscious consumers.
Source: Investing.com
COST stock ended Friday’s session at $1,048.61, just below a record high of $1,078 reached on February 13. With a market cap of $465 billion, Costco is the world’s second most valuable brick-and-mortar retailer – behind Walmart (NYSE:WMT). Costco has stood apart from other retailers this year, with shares rising 14.4% so far in 2025.
InvestingPro’s AI-powered quantitative model rates Costco with a ‘GOOD’ Financial Health Score of 2.94, indicating robust operational stability and financial management.
In stark contrast, Foot Locker (NYSE:FL) is set for a challenging week ahead. The New York-based sportswear retailer, which specializes in sneakers and athletic apparel, is expected to report its Q4 financial results ahead of the market opening on Wednesday at 6:45 AM ET.
Market participants expect a sizable swing in FL shares following the print, with the options market pointing to a possible implied move of 16.2% in either direction. Analyst sentiment is overwhelmingly bearish with 16 downward revisions and no upward adjustments in the weeks preceding the report.
Source: InvestingPro
The outlook for Foot Locker appears dim as it grapples with a tough economic environment characterized by high inflation and shrinking disposable income, leading to slower consumer demand for discretionary items.
The company is forecast to earn $0.72 per share, while revenue is expected to decline by 2.5% year-over-year to $2.32 billion. These figures reflect the mounting pressures on Foot Locker, as consumers tighten their belts and competition intensifies.
Looking ahead, the retailer’s management is expected to reveal soft profit and revenue guidance for the current quarter amid slowing sales and compressing margins.
Ongoing shifts in consumer behavior towards online shopping and direct-to-consumer models have left Foot Locker in a precarious position.
Source: Investing.com
FL stock ended Friday’s session at a 52-week low of $17.32, a level not seen since August 2023. At current valuations, Foot Locker has a market cap of $1.6 billion. Shares, which are trading below their key moving averages, are down 20.4% year-to-date.
Be aware that Foot Locker currently has a ‘WEAK’ InvestingPro Financial Health score of 1.5 out of 5.0, reflecting operational challenges and financial pressures.
Whether you’re a novice investor or a seasoned trader, leveraging InvestingPro can unlock a world of investment opportunities while minimizing risks amid the challenging market backdrop.
• ProPicks AI: AI-selected stock winners with proven track record.
• InvestingPro Fair Value: Instantly find out if a stock is underpriced or overvalued.
• Advanced Stock Screener: Search for the best stocks based on hundreds of selected filters, and criteria.
• Top Ideas: See what stocks billionaire investors such as Warren Buffett, Michael Burry, and George Soros are buying.
Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Invesco Top QQQ ETF (QBIG), Invesco S&P 500 Equal Weight ETF (RSP), and VanEck Vectors Semiconductor ETF (SMH).
I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.
