8 Key Items Shaping the Stock Market Wednesday: Fed, VIX, Amazon, Swarmer

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These are the early headlines and other items poised to influence the market at the start of trading Wednesday. As we share this collection of market drivers, U.S. equity futures point to a positive open, but we’ll want to revisit those futures after this morning’s February Producer Price Index (PPI) data out at 8:30 AM ET.

1. Investors are getting calmer even as the Iran war rages on well into its third week and oil prices remain above $100 a barrel. Wall Street’s so-called fear gauge, the CBOE Volatility Index, or VIX, was falling again Wednesday. The index declined 0.75 points to 21.62 early in the day. It’s on track for a fourth consecutive daily drop, getting closer to its pre-conflict level of 19.86, and now some way off its war high of 35 last week. Any reading above 20 indicates elevated market volatility. (Barron’s)

We would hardly interpret a VIX reading near 21.50 as investors being complacent, but after three weeks, it’s probably fair to say some are becoming desensitized to geopolitical headlines. Yesterday, National Economic Council Director Kevin Hassett said the expectation is still for a “four-to-six-week operation,” while adding that a longer war could “hurt consumers.” Yesterday, Honeywell (HON) said the Middle East conflict could hit the company’s first-quarter revenue by a high-single-digit percentage. Should the campaign ensue for another few weeks, odds are the impact will be wider spread.

2. Rising concern about higher inflation from surging oil prices is not going to press the Federal Reserve into an interest rate hike this week, but the idea could still find its way to the surface at a policy meeting overshadowed by the start of the Iran conflict just over two weeks ago. The rate-setting Federal Open Market Committee is universally expected to hold the policy rate steady in the 3.50%-3.75% range when members adjourn their two-day meeting on ‌Wednesday. (Reuters)

The catapult-like move in oil, gas, and diesel prices has, of course, caught our eye, and it has also pushed out rate-cut expectations tracked by the CME FedWatch Tool to December from the middle of this year. To us, the greater focus coming out of the Fed’s meeting will be the updated Set of Economic Projections (SEP) and Chair Jerome Powell’s press conference comments about the Fed’s views on higher energy prices against recent signs of a softening labor market.

3. Nvidia Corp. Chief Executive Officer Jensen Huang said the company is firing up manufacturing of H200 AI accelerators for customers in China, a sign of progress in the chipmaker’s effort to reenter the vital market. At a press conference on Tuesday, Huang said Nvidia had been licensed for “many customers in China” for H200 sales and is in the process of “restarting our manufacturing.” (Bloomberg)

Less than a month ago, when Nvidia (NVDA) reported its quarterly results, management called out that its guidance did not assume any data-center compute revenue from China. Clearly, a nice development and one that should translate into higher revenue expectations for the coming quarters. But how this fits into Jensen Huang’s GTC 2026 comment that he sees $1 trillion in Blackwell and Rubin demand through 2027 is unclear. If it’s on top of that figure, all the better, but if it is included, that would likely temper the market’s reaction. All in all, the demand picture for Nvidia’s chips as well as those from others remains very bright.

4. Amazon.com is planning to sharply cut the number of packages it ships through the U.S. Postal Service, a move that could cost the agency billions of dollars in much-needed revenue. The e-commerce giant, long the Postal Service’s biggest customer, has already begun ratcheting down its postal volume and wants to reduce it by at least two-thirds by this fall, when its current contract with the agency expires… (WSJ)

When we think about Amazon’s (AMZN) efforts to shrink delivery times from days to one day or less, this announcement isn’t that surprising. But with Postmaster General David Steiner saying earlier this month that he expects the United States Postal Service (USPS) to run out of cash by 2027 “without Congress's help,” Amazon’s move could have more widespread effects on competitors that rely on USPS to deliver their goods.

5. Shares in a drone technology developer backed by private security contractor Erik Prince surged more than 500 per cent on the company’s US stock market debut. Swarmer, whose software has been used by the Ukrainian military since 2024, jumped 520 per cent on its first day of trading on Nasdaq on Tuesday. (FT) U.S. M&A deal activity decreased in February, going down 26.7% with 1,013 announcements compared to 1,382 in January. However, aggregate M&A spending increased. In February 236.8% more was spent on deals compared to January. (FactSet)

The Swarmer (SWMR) IPO will catch many headlines, and it is a nice indicator of investor appetite for well-positioned companies. The data from FactSet tends not to grab as many headlines, but parsing the findings reveals M&A deal value is up 122% for the first two months of 2026 compared to 2025. Those findings point to a very healthy investment banking landscape and add to our bullish stance on shares of Morgan Stanley (MS) and Bank of America (BAC) .

6. Deutsche Bank analyst Melissa Weathers said the memory market looks strong going into Micron’s earnings report on Wednesday, as demand is still far outstripping supply. Weathers wrote in a note last week that tightness in the dynamic random-access memory market is expected to continue through 2027, especially as HBM requires more silicon than traditional DRAM products. That should allow Micron to raise average sales prices across its DRAM business, Weathers said, sending its revenues and margins up. (MarketWatch)

When Micron (MU) reports after today’s market close, comments about manufacturing tightness and pricing will be a key point of interest across Wall Street. Micron’s revenue and margins on the one hand, and the availability of memory and end market constraints on the other. So far, the cyclical nature of the memory market has kept Micron and other chipmakers from adding memory capacity, which means capex comments will also be of interest tonight.

7. Economic data today per TipRanks: Producer Price Index (February), Factory Orders (January), EIA Crude Oil Inventories (Weekly), Fed policy decision, and press conference.

8. Companies reporting today per TipRanks: AM – General Mills (GIS) , Macy’s (M) , SailPoint (SAIL), Williams-Sonoma (WSM) . PM – Five Below (FIVE) , Micron (MU) .

At the time of publication, TheStreet Pro Portfolio was long AMZN, BAC, MS and NVDA.