Stock Market Stumbles as Inflation and Nvidia Earnings Loom

NEW YORK, February 23, 2025 – Wall Street closed the week in a bitter note, as growing concerns about inflation and economic slowdown have affected investor sentiment. After reaching a peak of half a week all the time, the reverse path of Slamp; P 500 (^ SPGC), down 1.7% for the week, while Composite Nasdaq (^ IXIC) slipped 2%. The average industrial Dow Jones (^ DJI) experienced the highest decline, with nearly 3%.

What broke the deal?

Several factors contributed to the decline, with disappointing benefits for businesses and high-level inflation problems. Walmart (WMT) provided a lower-than-expected outlook, thereby reducing the confidence of the retail sector. Meanwhile, the continuing concerns of the Federal Reserve about inflation have indicated that tariff reductions may not occur as soon as investors expected.

“No way, the impulse actions had a terrible setback today. This hurts many aggressive growth investors,” said Jim Cramer of the CNBC. “Can this regression finally follow its course? I hope so. Otherwise, my prediction? More from the house of pain.”

Nvidia’s winnings Take the central scene

The most advanced profit of next week belongs to Nvidia (NVDA), scheduled for Wednesday after the closing of the market. Analysts predict that AI’s chip giant will earn adjusted profits of $0.84, an increase of 63% year after year. Revenues are expected to increase from 73 per cent to $38.26 billion.

Investors will be particularly interested in the comments of CEO Jensen Huang on the demand for AI chips. With DeepSeek’s growing competition from China, questions about Nvidia’s ability to maintain its field in the sector.

“Nvidia’s report is the most important of the week,” said Cramer. “Investors must own, not trade, this share. Managing Director Jensen Huang has repeatedly shown that he knows how to stay ahead of the curve. »

Other main learning reports

Besides Nvidia, several large companies are created to free their profits:

• Home Depot (HD) – Reports on Tuesday. Analysts expect a weaker quarter, though post-storm rebuilding efforts may help sales.
• Lowe’s (LOW) – Reports on Wednesday. Often compared to Home Depot, Lowe’s has been a steady performer.
• Salesforce (CRM) – Reports on Wednesday. The cloud giant is expected to show resilience despite being categorized as a momentum stock.
• Dell (DELL) – Reports on Thursday. Investors will watch how it benefits from AI adoption.

Inflation data and Fed surveillance

Beyond income, the economic data will be under microscope, with the inflation rate preferred by the Federal Reserve, the basic index of personal consumption costs (PCE) to be published Friday.

Economists predict that the core of the ECP increased by 2.6% in January, rising slightly from 2.7% in December. Each month, it is expected to increase by 0.3 per cent from 0.2 per cent in the previous report.

“A 2.6% increase in the base ECP for January means a significant advance in the 12-month base inflation rate,” said Michael Gapen, American chief economist at Morgan Stanley. This is in line with your forecast for the Fed’s first interest rate to arrive in June.

Investor outlook

Given that inflation is still above the 2% target of the Fed and the resilient labour market, markets are increasingly sceptical about anticipated tariff reductions. This has contributed to recent market volatility.

In addition, economic indicators such as consumer confidence, housing prices and a second estimate of GDP in the fourth quarter will provide a better understanding of the economic path.

As income reports are published and inflation data published, investors will monitor closely whether the recent market decline is a temporary correction or the onset of a more general crisis.