Last week’s sharp volatility saw growth stocks take a significant hit, with AI and tech names leading the downturn. The S&P 500 (SPY) pulled back from its all-time highs as investors reassessed valuations in high-growth sectors. As the market looks ahead, several key catalysts could drive sentiment and price action this week. Here’s what traders need to keep an eye on.
1. Nvidia Earnings – The AI Market Barometer
Nvidia (NVDA) is set to report earnings on Wednesday, and this could be the defining event of the week. With the company at the center of the AI boom, investors will closely scrutinize its results, guidance, and commentary on AI chip demand. Expectations are sky-high, given the stock’s nearly 95% gain over the past year. A strong beat could reignite bullish momentum in tech, while any weakness might trigger a broader market selloff.
2. Q4 GDP Revision – Economic Strength Under the Microscope
The second reading of Q4 GDP, due Thursday at 8:30 AM ET, will offer a deeper look into economic resilience. While revisions are typically incremental, any surprises could shift market sentiment regarding growth momentum. Traders will analyze this data to assess whether the economy remains strong or if cracks are emerging. This will also play a role in shaping expectations around Federal Reserve policy.
3. Core PCE Inflation – The Fed’s Favorite Gauge
The Core PCE Price Index, scheduled for release on Friday at 8:30 AM ET, is the Federal Reserve’s preferred inflation measure. After hotter-than-expected CPI and PPI readings, this data point will be crucial. A higher-than-expected print could delay rate cut expectations, weighing on equities, while a softer number might renew hopes for monetary easing. The outcome will likely dictate market direction heading into the weekend.
4. Consumer & Housing Data – Signs of Strength or Weakness?
Consumer sentiment and housing market performance will be in focus this week.
- Tuesday: Consumer Confidence report at 10 AM ET – Investors will watch whether market gains and slowing inflation have boosted sentiment.
- Wednesday: New Home Sales data – Housing market strength remains a key concern amid still-elevated interest rates.
Retail and home improvement stocks like Home Depot (HD), which reports earnings on Tuesday, could react to these trends.
5. Growth Stock Fallout – Is More Pain Ahead?
Friday’s sharp declines in growth names like Palantir (PLTR), AppLovin (APP), and Hims & Hers Health (HIMS) raised concerns about stretched valuations. Traders will be monitoring these stocks for potential continued weakness. Additionally, earnings from Salesforce (CRM) and Snowflake (SNOW) could either calm or exacerbate fears over the sustainability of growth stock valuations.
