Presidents’ Day Pause: Markets Digest Cooler Inflation as Investors Gird for GDP and Retail Sales Data

Market Overview - U.S. stock markets are closed on February 16th, 2026, for Presidents' Day, following a week of volatility and concerns about the sustainability of the AI boom [1] - Investors ended the week on a steady note, with major indexes showing resilience after a mid-week rout [2] Index Performance - The S&P 500 rose 0.05% to close at 6,836.17, while the Dow Jones Industrial Average increased by 0.10% to 49,500.93 [2] - The Nasdaq Composite fell 0.22% to 22,546.67, primarily due to a 2.2% drop in Nvidia [2] AI Disruption Narrative - The market is pricing in risks associated with "AI disruption," leading to a sell-off in software and service-oriented tech companies [3] - Companies like Alphabet and Microsoft are central to the debate on AI infrastructure costs versus revenue gains [3] Semiconductor and Hardware Strength - Semiconductor and hardware companies showed strength, with Applied Materials surging over 8% after a strong Q1 earnings report [4] - Rivian Automotive's stock soared 26.64% following an earnings beat, marking a positive development for the electric vehicle sector [4] Upcoming Market Events - Investors are preparing for a busy week of economic data and corporate earnings, including the release of the Federal Reserve's January meeting minutes [5] - Walmart is set to report quarterly results on February 19th, which will provide insights into consumer health [6] Economic Indicators - January Retail Sales data is expected to show modest growth, with a significant "data dump" on Friday including a projected 3% annualized growth rate for Q4 2025 GDP [7] Corporate Highlights - Coinbase gained 16.5% due to stock buybacks and positive stablecoin legislation outlook, while AppLovin experienced volatility, rebounding 6.4% after a previous drop [8]