Forward Guidance Newsletter

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US equities regained some ground on Monday after last week’s losses as investors anticipated fourth quarter earnings announcements and an important inflation report later this week.

Nvidia is set to release its Q4 earnings on Wednesday afternoon. After a prolonged period of stagnant trading, investors are likely eager for sparks to reinvest in the chipmaker, although Nvidia now faces heightened competition.

Wednesday’s report is expected to have significant implications for the broader market.

Additionally, January’s PCE report, due out Friday morning, has gained importance as other inflation indicators have shown strengths at the beginning of the year, notably PPI and CPI.

Despite this, we find it hard to believe that the reading will be influential enough to sway the Fed’s current stance. We expect this pause in monetary policy to remain for a while.

Overall, stocks have demonstrated remarkable resilience amidst uncertainty, even as investors grapple with emerging tariff policies and new data that challenges claims of sustained economic growth, complicating the Fed’s position.

Last week, signs of strain emerged, particularly when the S&P 500 had its most significant decline of 2025 on Friday, largely attributed to disappointing data from both the US and global markets. Specifically, the Philly Fed Manufacturing Index fell to 18.1 this month from 44.3 in January, and the Eurozone PMI also reported weaker than expected growth.

However, with the VIX at a reasonable 17.8, it indicates that market volatility remains relatively low. We’ll keep a close watch on developments this week.