TLDR
- February PCE inflation data coming this Friday after January showed cooling signs
- GameStop earnings report Tuesday amid cryptocurrency investment speculation
- Housing market data including Case-Shiller Index and home sales on the agenda
- Federal Reserve officials scheduled for remarks throughout the week
- Market snapped losing streak but uncertainty remains around trade policies
Market Overview
The market managed to break its four-week losing streak last week, though gains remained modest. The S&P 500 advanced 0.5%, while the Nasdaq Composite inched up 0.2%, and the Dow Jones Industrial Average rose 1.2%.
This performance came despite ongoing concerns about upcoming trade policies. Investors remain on edge about potential tariffs as President Trump’s April deadline approaches.
The Federal Reserve kept interest rates steady at its recent meeting. Fed Chair Jerome Powell’s comments provided some reassurance, but market uncertainty persists.
Economic Data to Watch
This week brings several key economic indicators that will shape market sentiment. The February Personal Consumption Expenditures (PCE) index is scheduled for release on Friday.
The January PCE report showed inflation was cooling. However, the Fed’s projections suggest inflation might rise above the 2.5% annual rate recorded in January.
Consumer sentiment will be in focus after recent reports showed declining confidence. The Conference Board’s Consumer Confidence Index comes Tuesday following last month’s sharp decline.
The final March results for the Michigan Consumer Sentiment Index will provide more insight into consumer attitudes. Recent reports have shown weakening sentiment among consumers, small business owners, manufacturers, and homebuilders.
Housing market data will attract attention as home sales remain slow due to affordability issues. The S&P Case-Shiller home price index for January and new home sales for February are expected Tuesday.
Thursday brings pending home sales data for February. This report should offer a forward-looking view on housing market activity.
Federal Reserve officials are scheduled to speak throughout the week. New York Fed President John Williams, Richmond Fed President Tom Barkin, and Atlanta Fed President Raphael Bostic will deliver remarks.
These speeches might offer more clarity on the Fed’s thinking about inflation, interest rates, and economic growth prospects.
Corporate Earnings Calendar
GameStop’s earnings report on Tuesday will draw attention from retail investors. The meme stock company turned a profit in its most recent quarter despite posting a revenue decline.
Recent reports suggest GameStop is considering investing in cryptocurrencies like Bitcoin. This potential move into digital assets has sparked interest among market watchers.
Dollar Tree will report earnings on Wednesday. The discount retailer delivered better-than-expected results last quarter amid strong performance in the discount retail sector.
Lululemon is set to report on Thursday after raising its sales and earnings guidance following a strong holiday season. The athletic apparel maker has shown resilience despite broader retail challenges.
Online pet retailer Chewy will also report this week. The company has been losing active customers, and several high-profile investors have sold their shares recently.
Homebuilder KB Home reports Monday after increasing home deliveries by 17% last quarter. Their results will complement the week’s housing market data.
Other companies reporting include spice maker McCormick, nuclear energy firm Oklo, uniform supplier Cintas, and identity tool provider SailPoint.
Market Trends and Concerns
Big Tech stocks continue to face pressure. The so-called Magnificent Seven (Google parent Alphabet, Amazon, Apple, Facebook parent Meta, Microsoft, Nvidia, and Tesla) finished last week down 0.7%.
This weakness has some analysts questioning the “American exceptionalism” trade that dominated markets for years. Some wonder if a rotation away from U.S. assets has begun.
Value stocks performed well last week, with the large-cap Russell 1000 Value index gaining 1% and the small-cap Russell 2000 Value index rising 0.5%.
However, experts caution about small-cap stocks as long-term investments. The growth of private equity has kept many quality small-cap companies in private hands rather than public markets.
This trend explains their “chronic underperformance” compared to large-cap stocks, according to market analysts. Small-caps may be better viewed as occasional trades rather than long-term investments.
Despite breaking the losing streak, the Nasdaq narrowly avoided a fifth straight weekly drop. History suggests that after four consecutive weeks of 2% or greater declines, the index typically remains negative in the following months.
Analysts advise that if Big Tech’s dominance is truly ending, investors should reconsider buying dips and instead look toward defensive value stocks.
The upcoming week’s data and earnings reports will provide important signals about inflation, consumer confidence, and corporate performance as markets navigate through uncertainty.
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