FOMC Day: The Market Awaits Policy Signals 18/02/2026

HOT stories for today

Market wrap:

• U.S. stocks ticked higher Tuesday, with the S&P 500 up 0.2% as gains in financials helped steady Wall Street after another week of losses. The Nasdaq Composite rose 0.2%, while the Dow Jones Industrial Average added 48 points, or 0.1%. Software shares lagged again, extending a slide fueled by worries that generative AI could undercut demand for niche, industry-specific tools. CrowdStrike fell 3.6% and ServiceNow dropped 1.1%. Elsewhere, Japan’s export growth jumped to the fastest pace in more than three years, nearly 17% in January, as shipments to China accelerated. Iran partially closed the Strait of Hormuz, a critical oil chokepoint, as Tehran held talks with the U.S. Meta Platforms deepened its ties with Nvidia, expanding an agreement to deploy millions of AI chips for a data-center buildout.
• Gold slipped back below $5,000, while cryptocurrencies remained under pressure. Traders turn to Wednesday’s release of minutes from the Federal Reserve’s January meeting, though the week’s main macro test is likely Friday’s personal consumption expenditures price index. The PCE, the Fed’s preferred inflation gauge, should offer a clearer read on the economy and the path for rates. Markets are “likely in a semi-holding pattern” heading into the data, particularly as the AI trade grows harder to handicap, said Ameriprise chief market strategist Anthony Saglimbene. On the earnings calendar, Booking Holdings, Carvana, and DoorDash report on Wednesday.

AI Anxiety Ripples Across Markets as S&P 500 Stays Near Record

• The S&P 500 ended Tuesday about 1.9% below its late-January record, getting a late lift from a rebound in tech after a rough stretch. AI worries are no longer just about whether a handful of megacaps are overspending. Investors are increasingly focused on the risk that the technology could upend industries and pressure white-collar jobs. “Nobody knows what the world really looks like a year from now when it comes to AI,” said Wells Fargo Investment Institute’s Sameer Samana. 
• Positioning reflects that uncertainty: money has flowed into utilities, power, and industrials tied to the AI buildout, alongside defensive corners such as consumer staples and Treasuries. Bonds have benefited as tech drags on risk appetite. The 10-year yield was little changed near 4.05%, with recent inflation and labor data easing pressure and a calmer policy backdrop helping Treasuries find support. Still, investors are watching for signs that companies will have to justify AI outlays  and whether that will mean tighter budgets, fewer hires, or outright job cuts later this year.

Stocks on the move:

• Palo Alto Networks (PANW): Shares slid nearly 6% after the cybersecurity firm issued a weaker-than-expected outlook for the current quarter. The company sees fiscal third-quarter adjusted EPS of 78 to 80 cents, versus the LSEG consensus of 92 cents.
• Cadence Design Systems (CDNS): Shares rose nearly 4% after the software maker guided to full-year adjusted EPS of $8.05 to $8.15, compared with the LSEG consensus of $8.05. Cadence also said its 2025 year-end backlog hit a record $7.8 billion and expects to recognize $3.8 billion of revenue over the next 12 months from remaining performance obligations.
• Caesars Entertainment (CZR): Shares gained more than 3% after fourth-quarter revenue of $2.92 billion topped the LSEG estimate of $2.89 billion. Caesars Digital posted adjusted EBITDA of $85 million, up from $20 million a year earlier.
• Devon Energy (DVN): Shares fell 1.5% even after a modest earnings beat. Devon earned 82 cents a share on an adjusted basis on $4.12 billion of revenue, versus FactSet expectations for 80 cents and $3.87 billion.

Watchlist: PANW, DVN, CDNS, MU, NVDA, META, GOOGL, RBLX

Key Economic Events Today:

EST time

08:30 am: USD Core Durable Goods Orders
08:30 am: USD Building Permits, Housing Starts
09:15 am: USD Industrial Production
02:00 pm: USD FOMC Meeting Minutes



Earnings

BMO (Before Market Open): Analog Devices (ADI), Moody’s Corp. (MCO)
AMC (After Market Close): Booking Holdings (BKNG), Carvana (CVNA), DoorDash (DASH)



The TEFS Analyst team wishes you a successful day!