Short Week, High Stakes for Wall Street 17/02/2026

HOT stories for today

Market wrap:

• US equities ended little changed on Friday after a softer-than-forecast inflation reading failed to ignite a risk-on bid. The S&P 500 eked out a 0.05% gain to 6,836.17, while the Nasdaq Composite slipped 0.22% to 22,546.67. The Dow Jones Industrial Average rose 48.95 points, or 0.10%, to 49,500.93. Data from the Bureau of Labor Statistics showed that consumer prices increased 0.2% in January, bringing the year-over-year increase to 2.4%. Economists surveyed by Dow Jones had expected a 0.3% monthly gain and a 2.5% year-on-year advance. Core CPI, which strips out food and energy, matched estimates at 0.3% on the month and 2.5% year over year. “This should be welcome news for markets, and the presumptive incoming Fed Chair Kevin Warsh,” said Phil Blancato, chief market strategist at Osaic. “This is only one month’s worth of data, but if the trend continues, it should pave a path for lower interest rates and rein in inflation.”
• Some investors, meanwhile, remained focused on the broader implications of artificial intelligence for corporate earnings and the economy. Keith Buchanan, a senior portfolio manager at Globalt Investments, said inflation concerns are “not unrelated” to growing anxiety that AI adoption could reshape revenue prospects across industries, potentially pushing unemployment higher while weighing on prices. Those fears reverberated through markets this week, expanding from software into real estate, trucking, and financials. Charles Schwab sank 10.8% for the week, and Morgan Stanley fell 4.9%, while Workday slid 11%. CBRE dropped 16% week-to-date. In the media, Disney gained about 3% on the week as Netflix fell 6%. All three major benchmarks finished the week lower. The S&P 500 fell 1.4% for a second straight weekly decline, the Dow dropped 1.2% and the Nasdaq slid 2.1%.

AI chip-tool boom: bargains fade

• Semiconductor-equipment stocks, the “picks-and-shovels” trade of the AI boom, have ripped higher in 2026, and now the easy money is largely gone. A basket of 25 semicap names is up mostly double digits year to date as chipmakers race to add capacity for generative AI, reshaping what is usually a deeply cyclical corner of the tech market. But the surge has pushed valuations up fast: 13 of the stocks now trade above their updated consensus price targets, even though Wall Street hasn’t meaningfully lifted those targets. Still, it’s not all froth. Some stocks look less stretched on forward P/E than the broader chip complex, including Screen Holdings, Photronics, Amkor, Axcelis and Veeco,  and earnings commentary across the industry has remained upbeat.
• Equipment lead times typically run six to nine months, meaning customers are placing orders well in advance to secure capacity. Applied Materials, for one, just guided to more than 20% growth in its semiconductor-systems business for 2026, underscoring how demand tied to advanced logic, DRAM, and high-bandwidth memory continues to build. Analysts say that spending momentum could extend for years as AI infrastructure scales globally. Bottom line: AI hasn’t just lifted demand, it’s shortened patience, leaving investors to decide whether to pay up for the winners or hunt for laggards that haven’t yet been priced for perfection.

Stocks on the move:

• DraftKings (DKNG): Shares fell about 17% after a downbeat 2026 revenue outlook. Q4 results beat estimates, but guidance of $6.5 billion to $6.9 billion missed the $7.31 billion consensus.
• Roku (ROKU): Shares jumped 15% after Q4 revenue and adjusted EBITDA topped estimates, and 2026 guidance came in above forecasts. Rosenblatt raised its price target to $118 from $106.
• Rivian Automotive (RIVN): Shares surged 20% after the EV maker forecast 2026 deliveries of 62,000 to 67,000, well above 2025 levels. Q4 loss was narrower than expected and revenue beat.
• Applied Materials (AMAT): Shares rose 11% after earnings and revenue came in well ahead of LSEG expectations.
• Expedia Group (EXPE): Shares slid more than 6% despite a Q4 beat after the company flagged “emerging AI-powered platforms” as a risk.
• Steel and aluminum stocks: Shares fell after the Financial Times reported President Donald Trump will roll back tariffs. Steel Dynamics (STLD) dropped 5%, Cleveland-Cliffs (CLF) nearly 3%, Century Aluminum (CENX) 10% and Alcoa (AA) 4%.

Watchlist: MU, COIN, PANW, MDT, U, RBLX, SMCI, NVDA, TSLA

Key Economic Events Today:

EST time

08:30 am: USD Empire State Manufacturing Index
10:00 am: USD NAHB Housing Market Index
12:45 pm: USD FOMC Member Barr Speaks
02:30 pm: USD FOMC Member Daly Speaks


Earnings

BMO (Before Market Open): Medtronic (MDT), Energy Transfer (ET)

AMC (After Market Close): Palo Alto Networks (PANW), Cadence Design (CDNS), EQT Corp. (EQT)
 

The TEFS Analyst team wishes you a successful day!