S&P 500 – 6,878.88 (-0.43%)

Dow Jones – 48,977.92 (-1.05%)

NASDAQ – 22,668.21 (-0.92%)

• U.S. Market Drivers: Equities moved lower as investors weighed AI disruption risks, escalating U.S.–Iran tensions, and persistent inflation after stronger-than-expected producer price data. Oil prices could surge by $10–$20 per barrel when markets reopen due to Middle East unrest.
• Market Overview: Asian markets generally advanced while European equities struggled. U.S. government bonds rallied, pushing the 10-year Treasury yield below 4% for the first time since November. The dollar weakened against major peers, gold prices climbed, and oil rebounded sharply as investors factored in potential supply disruptions from escalating U.S.–Iran tensions.
• Inflation Update: Headline month-over-month (MoM) wholesale prices increased 0.5% in January, up from +0.4% in December and above the +0.3% economists had expected. Year-over-year (YoY) gains reached 2.9%, slightly down from 3.0% in the prior month but higher than the expected 2.6%.
• Media & Entertainment: Shares of Netflix (NFLX) surged after opting not to match Paramount Global and Skydance’s bid for Warner Bros. Discovery (WBD), clearing the way for a potential tie-up between Paramount Skydance and Warner Bros.
• Technology Stocks: CoreWeave (CRWV) tumbled following widening quarterly losses and rising debt, while Autodesk (ADSK) gained after exceeding earnings estimates. Dell Technologies (DELL) jumped on strong AI server demand, boosting dividends and announcing a share buyback. Block Inc. (XYZ) rallied after announcing workforce reductions of nearly half its employees, and Intuit (INTU) fell despite strong results amid ongoing pressure on software stocks.
• Corporate Earnings: Berkshire Hathaway (BRK.B) remained steady ahead of earnings, reporting $10.2 billion in Q4 operating earnings, down more than 29% from a year earlier. The decline was driven by weakness in its insurance business.
• Market Rotation: Investors continued rotating into cyclicals, including financials, industrials, small caps, and other sectors, with airlines, cruise operators, apparel, delivery services, homebuilders, and resorts attracting late buying. The trend underscores a shift from technology to cyclicals over the past three months.
• Broader Index Trends: Despite AI news dominating headlines, the S&P 500 Equal Weight Index climbed more than 0.6% to a record close Thursday, reflecting broader market participation beyond mega-cap stocks. The S&P 500 entered Friday roughly flat for the week, on track for a modest monthly decline. Bitcoin traded near the midpoint of its recent range, slightly lower for the week.
• Technology & AI: Anthropic’s Claude app surged to No. 1 on Apple’s U.S. App Store following a Pentagon dispute, while Nvidia plans to unveil a new AI inference chip to speed up processing for OpenAI and other customers, intensifying the race for faster AI solutions.
• Space Exploration: NASA’s Artemis II mission will send the first Black astronaut and first woman to lunar orbit, marking America’s first crewed return to deep space in more than 50 years.

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“I hate war as only a soldier who has lived it can, only as one who has seen its brutality, its futility, its stupidity.” — Dwight D. Eisenhower

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Notable Stocks

• Meta Platforms (META)
• Netflix (NFLX)
• Warner Brothers Discover (WBD)
• Coreweave (CRWV)
• Autodesk (ADSK)

Weekly Notables

Oil Could Go Higher after U.S. and Israel Launch Strikes on Iran

The U.S. military has begun “major combat operations” in Iran, President Donald Trump confirmed Saturday, as tensions escalated sharply across the Middle East. In a video message posted to Truth Social, Trump said the objective was to defend the American people by eliminating imminent threats from the Iranian regime. A U.S. official told Reuters that American forces struck Iran by air and sea, with targets reportedly including several ministries in southern Tehran. Israel also launched attacks on the Iranian capital, with smoke seen rising from downtown areas.

Berkshire Operating Earnings Tumble in Buffet’s Final Quarter as CEO

Berkshire Hathaway reported a sharp drop in fourth-quarter operating earnings, marking the final reporting period under longtime CEO Warren Buffett. Operating earnings totaled $10.2 billion in Q4, down more than 29% from $14.56 billion a year earlier, driven largely by weakness in the conglomerate’s insurance operations. Insurance underwriting profits plunged 54% to $1.56 billion from $3.41 billion a year ago, while insurance investment income declined nearly 25% to $3.1 billion from $4.09 billion.

Earnings Spotlight: Target Corporation (TGT)

Target Corporation (TGT is expected to report fourth-quarter fiscal 2025 earnings on March 3 before market open. The company is expected to post Q4 revenues of $30.54B, suggesting a 1.2% y/y fall. Target's EPS estimate of $2.17 signals a 10% decline despite omnichannel strength.

What's Ahead

Economic:

• Monday (Mar. 2): S&P Final U.S. Manufacturing Purchasing Managers' Index (PMI), ISM Manufacturing, Auto Sales
• Tuesday (Mar. 3): New York Federal Reserve President John Williams remarks, Minneapolis Fed President Neel Kashkari interview
• Wednesday (Mar. 4): ADP Employment report, S&P final U.S. Services PMI, ISM Services, Fed Beige Book, EIA Crude Oil Inventories
• Thursday (Mar. 5): Continuing Claims, EIA Natural Gas Inventories, Initial Claims, U.S. Productivity, Import Prices
• Friday (Mar. 6): Nonfarm Payrolls, Average Hourly Earnings, U.S. Unemployment Rate, Cleveland Fed President Beth Hammack speaks
   

Earnings:

• Monday (Mar. 2): AAON Inc. (AAON), ADT Inc. (ADT), AST SpaceMobile Inc. (ASTS), Credo Technology Group Holding Ltd. (CRDO), EchoStar Corporation (SATS), MongoDB Inc. (MDB), Norwegian Cruise Line Holdings Ltd. (NCLH), Venture Global Inc. (VG)
• Tuesday (Mar. 3): AeroVironment Inc. (AVAV), AutoZone Inc. (AZO), Best Buy Co. (BBY), CrowdStrike Holdings Ltd. (CRWD), GitLab Inc. (GTLB), QXO Inc. (QXO), Ross Stores Inc. (ROST), Sea Ltd. (SE), Target Corporation (TGT), Thor Industries Inc. (THO), Viking Holdings Ltd. (VIK)
• Wednesday (Mar. 4): Abercrombie & Fitch Co. (ANF), American Eagle Outfitters Inc. (AEO), Broadcom Inc. (AVGO), Brown-Forman Corporation (BF/A), Dycom Industries Inc. (DY), Ecopetrol S.A. (EC), Full Truck Alliance Co. (YMM), Okta Inc. (OKTA), Rigetti Computing Inc. (RGTI), Veeva Systems Inc. (VEEV)
• Thursday (Mar. 5): Alibaba Group Holding Ltd. (BABA), Burlington Stores Inc. (BURL), Canadian Natural Resources Ltd. (CNQ), Ciena Corp. (CIEN), Costco Wholesale Corp. (COST), JD.com Inc. (JD), Kroger Co. (KR), Marvell Technology Inc. (MRVL), Petroleo Brasileiro S.A. (PBR), Samsara Inc. (IOT)
• Friday (Mar. 6): Algonquin Power & Utilities Corp. (AQN), Embraer S.A. (EMBJ), Eve Holdings (EVEX), Genesco Inc. (GCO), Tsakos Energy Navigation Ltd. (TEN)