Markets at a Glance
U.S. equity markets are bracing for another turbulent Friday session, capping off a rough February for American indexes. As of Thursday’s close:
- S&P 500: 6,908.86 — down 0.54%
- Nasdaq Composite: 22,878.38 — down 1.18%
- Dow Jones Industrial Average: 49,499.20 — up a modest 0.03%
The divergence between the Dow and tech-heavy Nasdaq tells the story of the month: a quiet but decisive rotation out of high-growth AI stocks and into more defensive and cyclical sectors.
Nvidia’s Record Earnings Couldn’t Save the Market
In what Wall Street analysts are calling a textbook “sell the news” event, Nvidia (NVDA) dropped more than 5% on Thursday — its worst single-day decline since April — despite posting what Morgan Stanley described as “the largest and cleanest beat in the history of the semis industry.”
Nvidia’s Q4 results shattered expectations, yet the market’s response was muted at best. Concerns about hyperscalers depleting cash flows on AI capital expenditures weighed on the stock despite the record numbers. Nvidia CEO Jensen Huang pushed back on the broader AI disruption narrative, telling CNBC that he believes markets have misread the situation — arguing that established software players would not be displaced by AI but rather enhanced by it.
Other chip stocks followed Nvidia lower, with Broadcom, Lam Research, Western Digital, and Applied Materials all declining on the session.
The AI Scare Trade: A Global Realignment
February 2026 will be remembered as the month global investors began hedging their AI bets. Stocks in Asia and Europe are poised to outperform U.S. benchmarks this month, as the so-called “AI scare trade” prompted investors to rotate into markets seen as more insulated from disruption risks.
The numbers are striking: the MSCI Asia Pacific Index has gained approximately 7.1% this month — the best February performance since the index’s inception in 1998 — while Europe’s benchmark index is up 3.6%, on track for an eighth consecutive month of gains, the longest winning streak in nearly 13 years. Meanwhile, Wall Street gauges have fallen over the same period, with futures pointing to further losses heading into Friday.
Key Movers on Thursday
Nu Holdings (NU) was among the biggest decliners, closing at $15.06, down 9.55%, as investors reacted to Q4 and full-year 2025 results, focusing on cost structure, credit-risk trends, and margin signals. Trading volume surged to more than 216% above its three-month average.
On the brighter side, J.M. Smucker popped 7% after delivering better-than-expected fiscal third-quarter results, earning $2.38 per share on revenue of $2.34 billion — ahead of analyst estimates on both the top and bottom lines.
Dell Technologies is in focus today after reporting fourth-quarter results after Thursday’s closing bell. Analysts had projected strong results driven by AI infrastructure growth, with revenue expectations of approximately $31.68 billion and EPS of $3.53.
Labor Market Holds Steady
On the macro front, the Labor Department reported initial jobless claims of 212,000 for the week ending February 21 — a slight increase from the prior week’s 208,000, but still below the consensus estimate of 216,000, suggesting the labor market remains historically tight despite high-profile layoffs in the tech sector.
All eyes now turn to Friday’s Producer Price Index (PPI) release, which will offer fresh signals on inflation and could influence the Fed’s rate trajectory heading into Q2.
Geopolitical Watch
Indirect nuclear talks between the U.S. and Iran resumed in Geneva. While some progress was reported, the uncertainty kept energy markets on edge, with WTI crude oil prices fluctuating near $65 per barrel.
2026 Outlook: Can the S&P 500 Deliver 12%?
Despite the rocky February, Wall Street’s full-year outlook remains constructive. Analysts expect the S&P 500 to return approximately 12% in 2026 — easily outpacing the index’s 30-year annual average of 8.1%. Whether that target holds will depend largely on how the AI narrative evolves, and whether today’s sell-off proves to be a healthy consolidation or the start of something deeper.
Markets close today at 4:00 PM ET. Watch for PPI data, Dell’s earnings reaction, and any fresh commentary from Fed officials as traders seek direction heading into March.
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