Market Pause on Presidents’ Day: Investors Eye Inflation Relief and Retail Earnings

Market Overview - U.S. stock markets are closed on February 16, 2026, for Presidents' Day, providing a breather after a volatile week marked by record highs in blue-chip stocks and a correction in the technology sector [1] - Major indexes showed mixed performance before the long weekend, with the Dow Jones Industrial Average (DJIA) gaining 51 points (0.10%) to close at 49,500.93, while the S&P 500 (SPX) rose 0.05% to 6,836.17, and the Nasdaq Composite (IXIC) fell 0.22% to 22,546.67 [2] Sector Performance - Defensive sectors and financials are gaining interest as investors rotate out of high-valuation technology stocks, with Nike (NKE) and UnitedHealth (UNH) leading the rally, rising 3.18% and 3.16% respectively [3] - The technology sector is experiencing challenges, particularly due to "AI fatigue," with Nvidia (NVDA) and Apple (AAPL) seeing declines of 2.21% and 2.27% respectively, contributing to a nearly 8% weekly decline for some megacap companies [3] Corporate News and AI Sentiment - The market narrative is shifting regarding Artificial Intelligence, with skepticism growing over the immediate returns on significant capital expenditures, affecting companies like Microsoft (MSFT) and Google (GOOGL) [4] - Despite the volatility, AppLovin (APP) saw a surge of 6.4% as analysts noted its potential in leveraging AI for advertising disruption, while Tesla (TSLA) is under scrutiny due to changing consumer demand and global competition [5] Upcoming Market Events - The week ahead is filled with significant events, including the Federal Reserve's release of January policy meeting minutes, which may provide insights into the pause in the rate-cutting cycle despite a drop in the Consumer Price Index (CPI) to 2.4% [6] - Corporate earnings reports are set to dominate headlines, with Walmart (WMT), Palo Alto Networks (PANW), Deere & Company (DE), and Booking Holdings (BKNG) expected to report, which will be crucial for assessing the sustainability of the recent sector rotation into "value" stocks [7] - The advance estimate of fourth-quarter 2025 GDP and the Core PCE Price Index will be released on Friday, with analysts predicting GDP growth around 3.0%, a decrease from the previous quarter's 4.4% [8]