Weekly Update

This weighed heavily on the Nasdaq 100, which recorded its worst monthly decline since early 2025.

‍2. Continued Small-Cap Dominance

While the Russell 2000 dipped in the final week of February due to broader profit-taking, it remained the standout performer for the month. Domestic-focused small caps benefited from a "coiled spring" valuation (trading at a 31% discount to large caps) and signs that US economic activity is stabilizing.

3. Geopolitical Tensions & Energy

Escalating tensions between the US and Iran pushed WTI crude oil prices higher. This geopolitical risk favored the Energy sector, which, along with Utilities and Consumer Staples, acted as a defensive haven while tech-heavy indices faltered.
‍

4. Cooling Growth vs. Sticky Inflation

Economic data released late in the week showed GDP growth coming in below expectations, while Core PCE remained stubbornly high. This "stagflation-lite" signal has put the Federal Reserve in a difficult position, tempering hopes for aggressive rate cuts in the first half of 2026.

‍

‍

Anticipating the Week Ahead: March 1-March 7

‍

As we enter the first week of March, the focus shifts from corporate earnings back to the health of the American consumer and the labor market.

‍

Key Developments to Watch
‍

• The February Jobs Report (Friday, March 6): This is the "make-or-break" data point for the week. Economists expect 60,000 new jobs, a sharp slowdown from January’s 130,000. A "Goldilocks" number (not too hot to fuel inflation, not too cold to signal recession) is needed to stabilize the S&P 500 near the 6,800 support level.
  ‍

• Retail Sector Health: Earnings from Costco (COST) and Target (TGT) will provide a definitive look at consumer spending power. If these retail giants warn about the "lower-income struggle" due to lingering price pressures, expect the Russell 2000 to face further volatility.
  ‍
• AI Infrastructure Sanity Check: Following Nvidia’s lukewarm reception, reports from Broadcom (AVGO) and Marvell (MRVL) will be scrutinized. Investors want to see if the "hardware layer" of AI is still seeing the same aggressive capital expenditure that fueled the 2025 rally.
  ‍

• Technical Support Levels: * S&P 500: Bulls are defending the 6,800 mark. A breach here could see a fast move toward 6,700.
  ‍
  • Nasdaq 100: Support is holding at 24,000. If tech selling continues, the next major floor is seen at 22,600.
    
    ‍

Market Note: Watch the 10-year Treasury Yield. Having closed February below 4%, any spike back toward 4.25% on hot labor data will likely trigger another round of selling in growth-sensitive tech stocks.