What's Bigger Than Trump Talk, AMD-Meta Deal, and Maybe Iran? Nvidia

The man in the blackened window stared back. What now? Was the price discovery experienced across U.S. markets precisely what was needed for the bulls to get a toehold and make a stand? The seconds pass. One after the other. Those seconds turned into minutes before the man in that window changed his expression. 

Maybe Tuesday was simply the necessary pause that must come after the rude slap in the face that had been Monday. Does he know? Do these markets have any kind of day-to-day institutional memory? All he really wants is a blanket on a chilly overnight and maybe a peanut butter sandwich. Oh, and maybe the home-style warmth that only those two items can uniquely provide. 

For markets, the stark reality is that AI infrastructure bellwether Nvidia  (NVDA)  will report quarterly results this evening. It's hard to imagine any way that this one event includes not just revenue performance and profit margins but guidance for sales both here and abroad and that CEO Jensen Huang's tone won't impact our marketplace more than anything else we've seen week to date. Yes, that includes the president's State of the Union address and all that has been said around that speech by those bearing vastly different opinions.

SOTU 

Pres. Trump on Tuesday delivered the longest "State of the Union" address in American history, breaking his own record set last year. This president has now delivered five of the eight longest SOTU speeches to date, with President Bill Clinton having delivered four of the nine longest. Nobody else is close. 

Tiptoeing around the more political aspects of the address, one section of the speech that came later on, was the part that markets likely will not ignore and that was when the president spoke on Iran. Pres. Trump's comments came ahead of Thursday's talks with Iranian leadership in Geneva and came amid a massive build-up of U.S. naval, air and even amphibious military power in the CENTCOM (Middle East) region. 

The president said, "They've already developed missiles that can threaten Europe and our bases overseas, and they're working hard to build missiles that soon reach the United States of America." The president also said that Iran had not heeded a warning to make "no future attempts" to rebuild that nation's nuclear weapons program after last June's military strike against those capabilities. 

Interestingly, the U.S. Dollar Index sold off last night, but has rallied into the wee hours, now trading close to Tuesday afternoon levels. This has had a calming impact on crude oil prices. I have been looking for a post-SOTU spike in energy commodity prices that has not yet developed. We'll see. WTI Crude is trading a rough 18% above its 2026 low at the moment.

Tuesday's Child 

A mega-deal between Advanced Micro Devices  (AMD)  and Meta Platforms  (META)  put investors in a better mood on Tuesday, especially when it comes to the development of generative and agentic artificial intelligence and the capital spending involved in getting from here to there. It also helped that AI start-up Anthropic, which has been a disruptor, announced a slate of tools for its large-language model "Claude" that could potentially be used in collaboration with existing software as a service platforms rather than as a replacement for them. 

In addition, the Conference Board's Consumer Confidence survey for February surprised sharply to the upside about a half hour into the regular trading session. A one-day chart of the S&P 500 shows that the market bottomed at precisely 10 a.m. ET when this report was released and never looked back...​ 

Very interestingly, as the headline print for the survey landed at 91.2, well ​above the 87.2 or so that Wall Street was looking for, much of the optimism appeared to come from those under 35 years of age when that demographic was broken out. That was a change from past surveys. 

Marketplace 

Tuesday's rally was broad. The S&P 500 gained 0.77% for the day as the Nasdaq Composite ran 1.04%. The Russell 200 outperformed both with a 1.2% pop as most U.S. equity indices moved higher. Among the indexes that I follow, only the KBW Banks failed to rebound from Monday's levels. 

In a round-up of Fed speakers on Tuesday, because the clown car really did show up in the center ring, Chicago Fed Pres Austan Goolsbee said that the U.S. economy has stopped making progress on inflation. This is either a blatant untruth if one chooses to follow consumer price index or truthful if one follows personal consumption expenditure. Pick your medicine. Fed Gov. Lisa Cook said that she sees unemployment rising due to the development of AI. Being that is all anyone in business or economics is talking about these days, I guess that means she at least read a newspaper on Tuesday morning.

Breadth 

Nine of the 11 S&P sector SPDR exchange-traded funds rallied on Tuesday, led by the Discretionaries  (XLY)  and Tech  (XLK) . Two of the three bottom-feeders on the day were defensive in nature as Health Care  (XLV)  rose out the day in the caboose. 

Winners beat losers by a little less than two to one at the NYSE and by better than two to one at the Nasdaq. Advancing volume took a commanding 75.8% share of composite Nasdaq-listed trade on Tuesday and a 68.6% share of composite NYSE-listed activity for the session as well. Does Tuesday undo the technical damage created on Monday?

The short answer is "no." We need more. Tuesday may have been the start of something better. This may have also been the pause that we need to see between Day Ones of Trend Reversal and Confirmation Days. That's if Monday was a Day One and not a Day of reconfirmation. What a mess. ​ 

What we do see is that the S&P 500 managed to gain just enough to maintain contact ​with its 21-day exponential moving average and 50-day simple moving average, which is what it needed to do to keep the bulls engaged. This morning, we'll find out if those levels are simply resistance or can act as a catalyst ahead of Nvidia later. Note that both Relative Strength and the daily moving average convergence divergence are markedly improved from where they were twenty-four hours ago. 

News

- Warner Bros Discovery  (WBD)  announced late Tuesday that the improved takeover offer from Paramount Skydance  (PSKY)  could be a "superior proposal" to the existing agreement that had been made with Netflix  (NFLX) . The new offer comes to $31 per share in cash and would include a $7 billion regulatory termination fee if that were to be a reason that the deal never closes. The WBD board will review the new bid vs. the existing deal. If the new bid is selected, Netflix will have four days to improve that deal.

 

- Anthropic announced on Tuesday that it was easing its core safety policies in order to remain competitive with other AI labs. Anthropic had always claimed that it would pause development of its models if anything in them could be classified as dangerous. Unless, that is, a superior model created by a competitor were to be released. Anthropic competes directly in the large-language AI space against the likes of OpenAI, xAI and Alphabet's  (GOOGL)  Google. Anthropic is also engaged in a current battle with the U.S. Department of War / Defense over how the company's tools can be used. The company has until Friday to get in line with the DoD or lose its federal contract.

Economics 

(All Times Eastern)

07:00 - MBA 30 Year Mortgage Rate (Weekly): Last 6.17%.

07:00 - MBA Mortgage Applications (Weekly): Last 2.8% w/w.

10:30 - Oil Inventories (Weekly): Last -9.014M.

10:30 - Gasoline Stocks (Weekly): Last -3.213M.

The Fed 

(All Times Eastern)

09:35 - Speaker: Richmond Fed Pres. Tom Barkin.  

1:20 p.m. - Speaker: St. Louis Fed Pres. Alberto Musalem.

Today's Earnings Highlights

(Consensus EPS Expectations)

Before the Open:  (LOW)  (1.94),  (TJX)  (1.28)

After the Close:  (IONQ)  (-.23),  (NVDA)  (1.53),  (CRM)  (3.05),  (SNOW)  (.27),  (ZM)  (1.49)

At the time of publication, Guilfoyle was long TJX, NVDA, AMD, GOOGL equity.