Weekly Stock Market Update & SPY Technical Analysis
This week will test the AI trade as Nvidia prepares to report its quarterly earnings and set the stage for its 2026 outlook. The $4.6 trillion company holds a large weight in the market, and its prolific impact on the advancement of AI makes them a critical name to pay attention to. Not only is the earnings data important, but the earnings call with the company’s CEO is crucial. His comments about AI, data centers, connectivity, and any form of advanced technology could provide signals to where capital will flow in the coming 3-12 months. Comments about partners will also matter, as the company’s partners could benefit from the rising tide of AI spending.
What happened last week
Last week was filled with economic data, including:
- Industrial production: factory output surged in January, with manufacturing output rising 0.7%, more than double what economists expected. Electronics and data center hardware for AI was a big driver. This is important because it could signal industry trends and where capital might flow.
- U.S. trade deficit: a decline in automotive shipments dragged on GDP and widened the trade deficit.
- Q4 GDP: U.S. Q4 GDP came in at 1.4%, missing the 2.5% expectations. The administration blames the government shutdown for the shortfall, but others things like weakness in exports (as explained above) also impacted the number. You may note that our watchlist this week consists of foreign indexes and companies, largely in countries where GDP growth is projected at 5%+, outperforming the United States. As U.S. stocks become expensive and growth slows, investors are shifting to more attractive foreign investments in booming economies.
- PCE index: YoY inflation came in at 2.9% for December, higher than the 2.8% expectations. This works against the notion that an interest rate is coming…and it may be the reason markets ended under pressure last week.
Focus this week
We already covered Nvidia above…outside the Nvidia trade, markets are focused on Iran-U.S. negotiations.
The situation between the U.S. and Iran is currently at a “make or break” point. The two nations are moving towards high stake negotiations in Geneva, but peace talks efforts are being eclipsed by a massive U.S. military buildup around Iran. Washington has issued a deadline for Tehran to submit a detailed nuclear proposal by February 24th, and has threatened to cancel the meeting if the proposal is ambiguous.
Also on the agenda this week
- Factory orders (Mon)
- Wholesale inventories (Tue)
- Consumer confidence (Tue)
- Producer price index (Fri)
- Construction spending (Fri)
We’ll be covering these reports as they are released in our daily morning updates.
SPY Technical Analysis
With Nvidia being the largest company on the market, a big move on its earnings can spark a market wide rally or sell-off (depending on results). SPY has been stuck in about the same range for more than two months, this week’s events may finally act as a catalyst to move it above or below this range. We’ve positioned ourselves accordingly ahead of this week’s data, and we’ll continue to adjust as needed.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of capital. Always conduct your own research or consult with a licensed financial advisor before making investment decisions.
Hyper Stocks and its contributors may hold positions in some of the securities or assets mentioned above. These positions are subject to change without notice. Any opinions expressed reflect current views at the time of writing and are not guarantees of future performance. Past performance does not guarantee future results.