New York Stock Market Rises on Nvidia & PPI Data – AI & Inflation Watch
New York stock markets rebounded last week, finding an unexpected ally in the U.S. Federal Supreme Court’s decision to curb Trump administration’s tariff policies. Market attention now shifts to Nvidia’s fourth-quarter earnings report, scheduled for this week, and the Producer Price Index (PPI), a key measure of wholesale price inflation. A shift toward a “fundamental-driven market” is anticipated, with corporate profits and macroeconomic indicators taking centre stage.
Supreme Court Lifts Tariff Cloud, Markets See Relief
On February 22nd, Yahoo Finance and the investment community reported that the three major New York stock indices all posted gains last week. The S&P 500 rose 1.1% for the week, while the Nasdaq Composite increased 1.3%, demonstrating strong recovery in technology stocks.
The Supreme Court was instrumental in this upturn, ruling 6-3 against the broad tariff powers assumed by the Trump administration under the International Emergency Economic Powers Act (IEEPA). This decision alleviated fears of “tariff-induced stagflation.” According to Gina Bolvin of Bolvin Wealth Management Group, given that IEEPA tariffs accounted for approximately 60% of all tariffs, the economic impact of the ruling will be limited, and market uncertainty has been significantly reduced.
However, former President Trump has indicated he will enact alternative tariffs of 10-15% based on the 1974 Trade Act, suggesting policy-related volatility will continue. Jeff Buchbinder of LPL Financial noted that while the rebound may be short-lived due to the potential for swift action on alternative tariffs, a reduction in tariffs could strengthen expectations for Federal Reserve interest rate cuts if it eases inflation.
‘Fate Day’ on February 26th: Will Nvidia’s Earnings Confirm the AI Boom?
The most significant event this week is Nvidia’s fourth-quarter earnings report, to be released after market close on February 26th. As the world’s highest market capitalization company, Nvidia’s performance is seen as a “barometer” for the sustainability of global investment in artificial intelligence.
Wall Street is focused on whether Nvidia can meet high expectations. Given recent profit-taking in the software sector and a broader market adjustment, Nvidia’s forward guidance will heavily influence investor sentiment across the technology sector.
Rising Oil Prices and PPI: Inflation Concerns Resurface
The macroeconomic environment remains challenging. Rising geopolitical tensions surrounding Iran are driving up oil prices, which have increased nearly 11% monthly due to heightened tensions over nuclear negotiations. Daniella Hasson of Capital Analytics warned that uncertainty, even without military action, could sustain a geopolitical risk premium.
Selling pressure in the bond market is also a factor. James Ash of Marlborough Investment Management is maintaining a reduced exposure to U.S. Treasury bonds, anticipating potential interest rate increases. A higher-than-expected January PPI reading, scheduled for release on February 27th, could further diminish expectations for Federal Reserve rate cuts.
This week, the New York stock market will navigate between the positive sentiment from policy relief and the uncertainties surrounding “AI profitability,” represented by Nvidia, and the persistence of inflation, reflected in oil prices and inflation data.
Key Events This Week
[Economic Indicators]
| Date | Key Indicators |
|---|---|
| February 23 | Chicago Fed National Activity Index, Factory Orders, Durable Goods Orders (Final), Dallas Fed Manufacturing Index |
| February 24 | ADP Employment, FHFA House Price Index, Richmond Fed Manufacturing Index, Conference Board Consumer Confidence Index, Dallas Fed Services Index |
| February 25 | MBA Mortgage Applications |
| February 26 | Initial & Continuing Unemployment Claims, Kansas City Fed Manufacturing Index |
| February 27 | Producer Price Index (PPI), Core PPI, MNI Chicago PMI, Kansas City Fed Services Index |
[Major Corporate Earnings]
| Date | Company |
|---|---|
| February 24 | Home Depot, Alibaba, Constellation Energy, MercadoLibre, American Tower, etc. |
| February 26 | Nvidia, Salesforce, Lowe’s, HSBC, Snowflake, etc. |
| February 27 | Intuit, Dell Technologies, Warner Bros. Discovery, Baidu, Coupang, etc. |
| February 28 | Chart Industries, Pearson, etc. |
Frequently Asked Questions
What caused the recent rebound in the New York stock market?
The U.S. Supreme Court’s decision to limit the Trump administration’s tariff powers was the primary driver of the recent stock market gains, alleviating fears of “tariff-induced stagflation.”
When is Nvidia’s earnings report scheduled to be released?
Nvidia’s fourth-quarter earnings report will be released after market close on February 26th.
What economic indicators will be released this week that could impact the market?
Key economic indicators scheduled for release this week include the Producer Price Index (PPI) on February 27th, as well as data on unemployment claims, consumer confidence, and manufacturing activity.
Given the complex interplay of factors influencing the market this week, what role do you believe investor sentiment will play in determining the overall direction of stock prices?