The US stock market's rollercoaster ride continues, leaving investors on the edge of their seats. But here's the twist: even a promising inflation report couldn't save the day.
US Stocks Dip Despite Positive Inflation Data:
Despite a brief recovery on Friday night, fueled by a milder-than-anticipated inflation report, the US stock markets couldn't shake off the week's downward trend. The S&P 500, Nasdaq 100, and Dow Jones all ended the week in the red. The S&P 500 dropped by 1.39%, the Nasdaq 100 by 1.37%, and the Dow Jones closed 614 points lower (1.23%), despite reaching a new record high earlier in the week.
The inflation report revealed a year-over-year decline to 2.4%, the lowest since May, while the core consumer price index (CPI) eased to 2.5%, its lowest since March 2021.
Amazon's Slump: A Cause for Concern?
Amazon's shares have been on a downward spiral, closing at $198.79 on Friday, marking a staggering ninth consecutive daily decline—a streak not seen since 2006. This sell-off is attributed to investor jitters over Amazon's massive $200 billion capital expenditure plan for 2026, far surpassing Wall Street's predictions. With a 23% drop from its November high, Amazon is edging closer to a multi-month trendline support near $191.
A Holiday Break and the 'Big Beautiful Bill' Tax Refunds:
As the US stock markets observe Presidents' Day, investors await the impact of the 'Big Beautiful Bill' tax refunds, hoping for a revival in tech stocks. Meanwhile, earnings season continues with reports from DoorDash, Coca-Cola, Walmart, Deere & Company, Dropbox, and NVIDIA.
Economic Calendar: A Week of Anticipation:
This week's economic calendar is packed with potential market-moving events, including the Federal Open Market Committee (FOMC) meeting minutes, advanced Q4 GDP data, core personal consumption expenditures (PCE) price index, and flash PMIs.
GDP Growth: A Tale of Resilience and Uncertainty:
The US economy showcased its resilience in Q3 2025, growing at a robust 4.4% annualized rate, the strongest in two years. This growth was driven by robust consumer spending and exports, despite import and inventory adjustments. However, the 43-day government shutdown in 2025 looms over the upcoming Q4 GDP release, with expectations of a sharp decline to around 3%. Interestingly, the Atlanta Fed's GDPNow estimate predicts a slightly higher 3.7% annualized rate for Q4.
Nasdaq 100 and Dow Jones: Technical Analysis:
The Nasdaq 100's early February dip to 24455, its lowest in two and a half months, followed a potential double top and a loss of momentum. While a rebound to 25382 eased short-term risks, a sustained break above 26150-26200 is needed for a bullish outlook. The Dow Jones, after consolidating for five weeks, surged in early February, breaking 50000, but failed to hold onto gains, suggesting a potential false break higher.
And this is where it gets intriguing: will the Dow Jones break below 48500, confirming a bearish trend, or will it rally back towards its recent highs? The coming days will be crucial in determining the market's direction.
What's your take on the market's recent volatility? Do you think the 'Big Beautiful Bill' tax refunds will provide the much-needed boost to tech stocks? Share your thoughts and predictions in the comments below!
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