Market Insights

Stocks are holding their ground before the biggest company reports earnings.

The S&P 500 rose 1.1 percent in the holiday-shortened period between Friday, February 13, and Friday, February 20. The tech-heavy Nasdaq-100 also broke a three-week losing streak and had its biggest gain since early January.

Attention now turns to Nvidia (NVDA), which reports earnings after the closing bell on Wednesday. The AI-chip giant has consolidated for almost nine months, causing the broader technology sector to lag. That may boost the importance of the results — especially if they trigger a breakout.

Other companies associated with AI hardware remained strong. Memory-chip makers like Micron Technology (MU) and SanDisk (SNDK) held near record highs. Fiber-optic companies like Ciena (CIEN) and Corning (GLW), continued into record territory. Analog Devices (ADI) jumped on data-center demand. Chip-equipment companies like Applied Materials (AMAT) and Teradyne (TER) have also remained near record levels.

All those companies support datacenter investment and chipmaking. Could their gains reflect strength in NVDA’s business?

Tariffs and The Fed

Last week brought several economic headlines. Perhaps most important, the U.S. Supreme Court overturned most of President Trump’s tariffs. While the immediate implications of the ruling aren’t clear, it was consistent with a recent shift away from trade wars. The White House responded with 15 percent global tariffs using a different law with a 150-day time limit.

Second, minutes from the last Federal Reserve meeting noted that some policymakers want to include mention of interest-rate hikes. While that news was mildly hawkish, it didn’t have much impact because the central bank is undergoing a leadership change without anyone expecting a rate move until mid-June.

Third, initial jobless claims were lower than expected. Manufacturing reports from the Fed’s New York and Philadelphia branches also surprised to the upside. Those reports could suggest the cyclical economy remains strong — especially the industrial sector.

Fourth, some data came up short. Fourth-quarter gross domestic product missed estimates and December’s personal consumption expenditures (PCE) price index was slightly higher than expected. The numbers, later than usual because of last year’s shutdown, were overshadowed by the tariff ruling.

Nasdaq-100, daily chart, showing key patterns.

Megacaps in Focus

NVDA downsized a major investment in OpenAI from $100 billion to $30 billion. The company also announced a new multiyear partnership with Meta Platforms (META). This week’s earnings could focus attention on the launch of Rubin chips and the company’s GTC AI conference March 16-19.

Investors may expect strong results after hyperscalers like Microsoft (MSFT) and Amazon.com (AMZN) boosted capital-spending plans.

Tesla (TSLA) also produced its first Cybercab in Austin last week and is planning to release the vehicle in April. Electrek separately reported on a growing number of accidents associated with the company’s Robotaxi fleet. (Those are Model Ys with FSD software.) Further news on the technology could be the main catalysts for TSLA shares.

Those upcoming events could potentially restore interest in megacap growth stocks and the Nasdaq-100 in general.

Chart watchers might have also noticed that the index had a false breakdown below its February 5 low before rebounding. It also ended last week with a bullish outside day (a lower low and higher high than the previous session). Those may be viewed as positive reversal patterns.

Some chart watchers could also think the Nasdaq is trying to break a falling trendline.

Earnings and Synergies

Most of the big gainers in the S&P 500 last week advanced after reporting quarterly results.

Omnicom (OMC), which is digesting its purchase of Interpublic, had its biggest rally since the pandemic. The advertising giant doubled its estimated synergies from the combination and announced a $2.5 billion accelerated share buyback.

Global Payments (GPN) beat earnings estimates. The company is also buying back stock and cutting costs after the recent acquisition of Worldpay.

Moderna (MRNA) reported strong quarterly results and forecast lower expenses. The U.S. Food & Drug Administration also accepted a flu vaccine application after previously refusing a review.

Garmin (GRMN) also surpassed Wall Street estimates, supported by fitness products.

All five of the index’s biggest decliners fell after announcing results.

Communications, industrials and financials were the best performing sectors last week. Precious metals, solar energy and emerging markets also climbed.

Consumer staples and software companies were the weakest groups.

Charting the Market

The S&P 500 probed a two-month low of 6,775 last week before rebounding to stay in its recent range. The index also bounced at the bottom of its Keltner channel, which may reflect limited selling pressure.

Prices spent most of last week below their 21-day exponential moving average and 50-day moving average, but rebounded to close above them. Safe havens like consumer staples also faded. That may suggest risk appetite is increasing.

Wilder’s Relative Strength Index (RSI) is also starting to inch higher after making a higher low. That may suggest improving short-term momentum.

Given the long period of sideways movement, traders may see potential for acceleration to the upside if the index breaks its current range.

In a separate note, LSEG reported that investors purchased almost $12 billion of U.S. equity funds in the week ended last Wednesday. It was the biggest inflow since mid-January, according to Reuters.

S&P 500, daily chart, with select patterns and indicators.

The Week Ahead

This week’s agenda includes a few events in addition to NVDA’s results.

Home Depot (HD) reports earnings tomorrow. Consumer confidence is also due. President Trump’s State of the Union speech is in the evening.

Crude oil inventories are on Wednesday morning. NVDA reports in the afternoon, along with Salesforce (CRM) and Trade Desk (TTD).

Thursday features initial jobless claims. Dell Technologies (DELL) and Intuit (INTU) issue results in the afternoon.