8 Key Items Shaping the Stock Market Tuesday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, while off their lows on Monday night and early on Tuesday morning, U.S. equity futures point to a modestly higher market open later on Tuesday morning.

1. Artificial intelligence start-up Anthropic is hosting a live virtual demonstration of its Claude chatbot’s newest capabilities on Tuesday morning… Anthropic says viewers who tune in at 9:30 a.m. Eastern time will witness live demonstrations of what Claude can do, and what working with Claude could look like, along with insights and new product announcements from Anthropic’s leadership. (Barron’s)

Given the value destruction over the last few days that stems from what Anthropic could do, we expect this event to garner much interest across Wall Street on Tuesday morning. We’ll be tuning in and will share our thoughts and reactions following the event. As important, though, will be the responses by companies reporting this week and next, especially those in the software space. As we discussed on Monday, we have several on tap, including Workday (WDAY) , Snowflake (SNOW) , Intuit (INTU) and Salesforce (CRM) . Of those, the one that will likely get the spotlight will be Salesforce, but we also suspect Nvidia’s (NVDA) Jensen Huang will reference the Anthropic event as he outlines what’s ahead for Nvidia.

2. Paramount Skydance submitted a higher offer for Warner Bros Discovery, a source familiar with the matter told Reuters on Monday, ratcheting up efforts to derail the HBO Max owner's deal with Netflix. Paramount's new bid — which improves its initial offer of $108.4 billion, or $30 per share, for the whole company — seeks to address Warner Bros concerns about the certainty of its financing, the source said. (Reuters)

As was written there, Paramount’s (PSKY) higher offer has yet to be revealed, but speculation puts it around $32 per share. There may be other terms and conditions that could be a factor, but for now, we’ll need to see what, if anything, Warner Bros says about Paramount’s offer. If Warner Bros formally considers the offer, the next move will be the one from Netflix (NFLX) , which has four days to match Paramount’s new offer or it could bail out of the bidding process.

3. Home Depot topped estimates for fourth-quarter results and maintained its annual forecasts, as the home-improvement chain operator benefited from resilient demand from professional contractors and lower-cost repairs by budget-strapped customers. Home Depot has leaned on professional (Pro) customers, such as contractors, builders, and carpenters, whose large, ongoing jobs have helped offset the slowdown in big do‑it‑yourself remodels amid elevated borrowing costs and a weak U.S. housing market.

First things first, Home Depot’s (HD) same-store sales for the reported quarter rose 0.4% compared with analysts' expectations of largely flat sales. Better than expected, but not a barn burner either. Compared to Walmart’s (WMT) 4.6% comp sales figure for the same quarter, and the figures we shared from Costco (COST) paint a more revealing picture about the consumer. Home Depot maintained its fiscal 2026 comp sales forecast of flat to up 2%, but January and February weather may mean that it is more back-end loaded. We’ll parse those comments on Tuesday morning’s earnings call, as well as what the management team shares about new home construction and repair, remodel spending expectations.

4. Advanced Micro Devices said on Tuesday it has agreed to sell up to $60 billion worth of artificial intelligence chips to Meta Platforms over five years in a deal that allows the Facebook owner to purchase as much as 10% of the chip firm. AMD signed a similar pact with OpenAI last year, which was hailed as a vote of confidence in its chips and software, significantly boosting its stock price. (Reuters)

With a headline like that, Tuesday's knee-jerk reaction is likely to result in some pressure on the shares of other AI chip companies, like Nvidia, Marvell (MRVL) or Broadcom (AVGO) . However, when we digest the full story, we find the following from Meta’s infrastructure head, Santosh Janardhan:

Meta plans to continue to buy chips from other vendors and develop its in-house processors at the same time… Meta has been in discussions with Google about using the company's tensor processors (TPUs) for AI work, sources have said. The scale at which Meta is building data centers and infrastructure requires multiple chip vendors and approaches, Janardhan said.

Those comments by Janardhan speak to the tight industry capacity that is leading to multiple tie-ups to ensure a steady supply of chips as hyperscalers, and others move forward with their capital spending plans. As background, the market for inference hardware is expected to be far larger than the market for the equipment needed to build the large models AI runs on.

5. Cerebras Systems has confidentially filed for a US initial public offering for a second time, as the AI chip designer seeks to capitalize on surging demand for high-performance computing infrastructure and a landmark supply agreement with OpenAI. (Digitimes)

Given the comments from Meta’s Janardhan above, we’re not surprised Cerebras would look to tap the public markets, and odds are it won’t be the only one. We’ll add that to the growing list of IPOs expected in the coming months, the same list that led us to upgrade the shares of Morgan Stanley (MS) on Monday following their recent pullback. It’s also one that, given the pullback in SuRo Capital (SSSS) shares, makes for a nice true-up trade for members who are underweight the shares relative to the Portfolio.

6. President Trump will use his State of the Union address to sell the public on the economy and unveil new measures meant to lower costs, as Republicans try to address voters’ concerns ahead of the midterm elections later this year. The official theme of the speech, according to White House officials familiar with the draft: “America at 250: Strong, Prosperous and Respected” (WSJ)

We will be tuning into the president’s address on Tuesday night, and more than likely, as with other presidents, Trump will be showcasing a number of wins over the last year. However, we’ll be more interested in what he discusses about the road ahead in terms of fiscal stimulus and job creation, taxes, tariffs and trade, inflation, and current geopolitical tensions, including the ones with Iran. Do we expect point-by-point plan specifics? No, this isn’t really the venue for that, it’s more of an agenda setter between now and the mid-term elections.

7. Economic data today per TipRanks: FHFA Housing Price Index (December), S&P Case-Shiller Home Price Index (December), Consumer Confidence (February), Wholesale Inventories (December).

8. Companies reporting today per TipRanks: American Tower (AMT) , Armstrong World (AWI) , Elanco Animal Health (ELAN) , First Watch (FWRG) , Home Depot (HD) , Keurig Dr Pepper (KDP) , Planet Fitness (PLNT) ; Axon (AXON) , Boston Beer (SAM) , Cava (CAVA) , HP (HPQ) , Interparfums (IPAR) , Lucid (LCID) , Mosaic (MOS) , Realty Income (O) , Tanger Factory (SKT) , Trex (TREX) , Workday (WDAY) .

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At the time of publication, TheStreet Pro Portfolio was long AXON, AVGO, COST, MRVL, MS, NVDA, SSSS and GOOGL.