Nvidia’s Q4 2026 earnings report is due after the close on the 23th of February 2026 and the AI leader will again see its forward guidance as an important earnings datapoint as we begin 2026. Nvidia shares are essentially flat YTD around $190, having consolidated sharply from last fall’s $212 highs amid broader rotation out of mega-cap tech and lingering questions about the durability of hyperscaler AI capex spending. Earnings expectations are understandably rich (the company has repeatedly crushed for 12 straight quarters) with consensus estimates calling for ~$65.6–65.9B in revenue (up ~67% YoY) and $1.52 non-GAAP EPS (up ~71%), right in line with management’s own $65 billion ±2% guide issued in November. Gross margins are expected to hold at an stellar ~74.8–75.0%, with operating leverage still intact despite rising memory and TSM foundry CoWoS capacity costs.
Geopolitical developments are back in the headlines following a pivotal Supreme Court ruling on tariffs and buildup of military forces in the Middle East.
The fate of President Trump’s tariffs are in question after the Supreme Court ruled that Trump’s emergency tariffs are unconstitutional. Following the news, President Donald Trump defied the ruling by announcing a new 15% global tariff.
At the same time, fears are rising that a strike on Iran is on Going following reports that President Donald Trump is considering full military action. The Strait of Hormuz off Iran’s coast sees more than 14 million barrels of oil pass through, or about a third of global exports. That Strait is still closed. We can therefore imagine the negatives impact of this closing on the global market.
A rally in oil prices is helping to push broad commodity indexes back toward a key level , with the iShares S&P GSCI Commodity-Indexed Trust ETF (GSG) in the weekly chart.
GSG broke above resistance at the $24 level shown with the dashed line and rallied toward the prior high seen in mid-2022 . A rejection off that level is reversing higher once again following the gain in oil prices.
That’s an important development following growing hawkishness at the Federal Reserve. Despite expectations that a new incoming Fed chair will pressure the FOMC to keep cutting rates, the most recent minutes of the Fed’s last rate-setting meeting showed that “several” policymakers suggested higher rates could be needed if inflation doesn’t moderate.
A key report on consumer inflation showed the Fed’s preferred gauge remaining well above target and accelerating the most since last February. The rally in commodity indexes threatens further upside pressure on inflation.
The Fed’s most recent meeting continues to indicate a hawkish shift at the central bank. The meeting was interpreted by most as a “hawkish pause” as the Fed voted to keep rates steady while also upgrading its assessment of the economy. The recently released minutes of the meeting shows a growing concern over inflation levels that remain stubbornly high. The Personal Consumption Expenditures (PCE) price index is showing signs of inflecting higher after the disinflation trend stalled out around the 3% level. The chart below shows the core series that excludes food and energy prices, which rose by 3.0% year-over-year in December and was the largest increase since last February.
Headline inflationary pressures could keep building if broader commodity indexes rally following a major breakout from a bullish consolidation pattern extending back several years. Other areas of the capital markets sensitive to inflation are holding up including precious metals, while energy stocks are surging ahead as well. The percent of stocks in the S&P 500 energy sector trading above their 50-day moving average (MA), which hit 100% for the first time in over a year is very clear. The energy sector is among the best performing during periods of high and rising inflation. The reflation trade is also positive for the economic outlook and is generally positive for the stock market. Analysis shows that the S&P 500 averages a 20.5% gain over the next year when 100% of energy stocks are above their 50-day MA.
Concerns are emerging over the AI trade as valuations in the S&P 500’s biggest stocks are well above historical averages while a massive ramp in capex spending by the largest AI hyperscalers eats into cash flow. The pullback in many Mag 7 stocks is weighing on the S&P 500 given their large weight in the index. But that’s masking a strong rally in the average S&P stock to start the year. On a year-to-date basis, approximately 66% of S&P 500 members are outperforming the benchmark which is the highest level on record going back to 1986. The broadening rally likely reflects the shifting earnings outlook where the average S&P stock is projected to grow earnings at a faster pace than the Mag 7.
