PCE Inflation Report Sets The Market Tone 20/02/2026

HOT stories for today

Market wrap:

• Stocks slipped after the morning’s macro prints showed the US trade deficit widened rather than narrowed. The S&P 500 fell about 0.3%, leaving the benchmark little changed on the year. The Nasdaq Composite lost 0.3%, while the Dow Jones Industrial Average dropped 267 points, or 0.5%. Geopolitical risk also crept higher. Tensions with Iran intensified after Donald Trump said he would decide within the next 10 days whether to authorize military strikes. Oil rose on fears of an attack. On the trade front, nearly a year of record tariffs has done little to curb import demand: the US brought in roughly $2 billion less than a year earlier, but paid meaningfully more for what it did buy.
• Meanwhile, the “AI replaces everything” narrative is losing some bite. Recent readouts, including from Figma  suggest there’s substantial revenue to be made by companies helping users integrate AI tools into everyday software workflows, rather than displacing the software stack outright. The calendar is loaded. Friday’s PCE price index is the near-term focus, but investors are also watching for a closely followed Supreme Court decision that many on Wall Street expect could address the legality of Trump’s tariffs under the International Emergency Economic Powers Act. Traders generally think equities would take a knockdown of the duties in stride, even if the White House is expected to seek alternative routes to reimpose them later. The court doesn’t preannounce rulings, and additional decision days are slated for next Tuesday and Wednesday.

Markets Eye GDP, PCE for Rate-Cut Clues

• Traders will get another read on the economy Friday morning with the release of fourth-quarter GDP. Economists surveyed by Dow Jones see real growth running at a 2.5% annual pace, a step down from the prior quarter’s 4.4% surge that handily beat expectations. Also on deck: the personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge. Consensus calls for headline PCE to rise 2.8% from a year earlier, while core PCE, which strips out food and energy, is seen up 3% over the past 12 months.
• Inside the Fed, the debate is still split between officials focused on cushioning the labor market and those wary of declaring victory on inflation. Price pressures have eased broadly, but inflation remains above the central bank’s 2% target. Minutes from the January meeting show some policymakers want clearer evidence that disinflation is reasserting itself before backing further rate cuts.

Stocks on the move:

• Akamai Technologies (AKAM): Shares of the cloud and edge-computing firm slid nearly 8% after hours after the company issued weaker-than-expected first-quarter guidance. Akamai forecast adjusted EPS of $1.50 to $1.67, versus the $1.75 consensus estimate compiled by LSEG.
• Dropbox (DBX): The file-sharing company dipped less than 1%. Dropbox posted fourth-quarter adjusted EPS of 68 cents, edging past the 67-cent estimate, while revenue came in at $636 million, above the $629 million Wall Street forecast, according to LSEG.
• Newmont (NEM): The miner rose about 2% in late trading. Newmont reported adjusted EPS of $2.52, topping the $2.04 StreetAccount consensus, and said free cash flow hit a record $7.3 billion.
• Live Nation Entertainment (LYV): Shares gained roughly 2% after strong fourth-quarter results. Live Nation reported $6.31 billion in revenue, beating the $6.11 billion analyst estimate, per LSEG.

Watchlist: AKAM, TXRH, DBX, LYV, MSFT, OPEN, PPL, SMCI

Key Economic Events Today:

EST time

08:30 am: USD Advanced GDP
08:30 am: USD Core PCE Price Index
09:45 am: USD Flash Manufacturing PMI
09:45 am: USD Flash Services PMI
09:45 am: USD FOMC Member Bostic Speaks
10:00 am: USD New Home Sales
10:00 am: USD Consumer Sentiment
10:00 am: USD Inflation Expectations


Earnings

BMO (Before Market Open): Anglogold (AU), PPL Corp. (PPL), Lamar Advertising (LAMR)




The TEFS Analyst team wishes you a successful day!