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Stocks opened up and stayed up, even under late selling pressure, amid more strong earnings and incoming economic data that continues to support Federal Reserve Chair Jerome Powell’s wait-and-see approach to interest rates. Risk-on sectors led the way higher, as the Nasdaq Composite posted the biggest gain among the three main indexes.
Minutes from the January Fed meeting show policymakers were divided when they voted to leave the target range for the federal funds rate unchanged last month. Federal Open Market Committee (FOMC) members are also split on the trajectory of inflation, with Kevin Warsh set to replace Powell in May.
The Census Bureau said housing starts were up 6.2% to a five-month high in December, while building permits exceeded the Wall Street consensus estimate. Durable goods declined during the last month of 2025, but the print was better than expected. Industrial production increased by 0.7% month over month in January, as manufacturing activity accelerated.
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“While the AI investment boom is expected to continue,” Wells Fargo economists Shannon Grein and Tim Quinlan write, “recent data suggest early signs of a broader pickup, with traditional capex stabilizing and non‑high‑tech output improving.”
The main event on this week’s economic calendar is Friday’s release of the Fed’s preferred inflation gauge, the Personal Consumption Expenditures Price Index (PCE).
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Meanwhile, company-level fundamentals are solid, too, especially at the top line as well as for key sectors. “At this late stage of the earnings season,” FactSet analyst John Butters observes, “the (blended) revenue growth rate for the S&P 500 for Q4 is 9.0%.”
That would be the fastest rate since the third quarter of 2022 if it holds. And, as Butter notes, 10 of the 11 stock market sectors are reporting year-over-year revenue growth, with tech, communication services and health care stocks reporting double-digit growth.
Caesars Entertainment gets a tax refund boost
Caesars Entertainment (CZR, +13.0%) beat Wall Street’s estimate for fourth-quarter revenue, and the consumer discretionary stock soared as management reassured investors, traders and speculators about the situation in its key market while seasonal factors take hold.
“There’s really no crisis happening in Vegas,” CEO Tom Reeg said on management’s conference call. “The way I’d characterize the business is peak events, peak weekends, big conferences,” he added, conceding that demand is “challenging” during “shoulder periods” with no big events or conferences on the calendar.
Caesars reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $901 million, short of Wall Street’s estimate of $902.5 million. Revenue was up 4% year over year to $2.92 billion and beat the Street’s call for $2.8 billion. Las Vegas properties posted EBITDA of $447 million vs a consensus forecast of $447 million, though revenue was down 3.4%.
Susquehanna analyst Joseph Stauff, who upgraded CZR to Positive (Buy) from Neutral (Hold) in January, reiterated his rating but reduced his 12-month target price from $31 to $29 following management’s earnings announcement.
The fourth-quarter print is “likely the beginning of a ‘beat & raise’ earnings streak outlook which should drive meaningful upside in the stock,” the analyst concludes, citing regional trends for its core Las Vegas operations, improving online casino growth and consumer tailwinds during the February-March-April tax refund season.
Apple will take its AI bite
Apple (AAPL, +0.2%) hasn’t been immune to the pressures impacting tech stocks since late 2025, but the iPhone maker has outperformed its sector recently. And at least one interested (and interesting) observer sees Apple’s relative strengths translating into absolute gains, at least in terms of AI share.
“Apple has three scheduled events this year on the calendar – March, May and September,” Ritholtz Wealth Management CEO Josh Brown says. “Agentic Siri powered by Google Gemini will be the subject at one of them.”
And it’s game on from there: “If you thought Apple wasn’t coming for the entire consumer AI opportunity,” Brown says, “I’m here to tell you that Apple is coming for the entire consumer AI opportunity.” Eventually, according to Brown, other AI products will become “plug-ins” for the iOS-App Store ecosystem.
“Apple gets paid on everything, every app has to be interoperable with what it wants to do,” he adds, noting that there are 2.5 billion active Apple devices on Earth, including iPhones, iPads, Macs, Apple Watches, AirPods, Apple TVs and MacBooks.
“Agentic Siri is going to run the table,” Brown concludes. “Just a matter of when. Nobody is ready for it.”
AAPL stock was down 2.8% year to date through Tuesday, trailing the S&P 500’s 0.1% gain but outperforming the State Street Technology Select Sector SPDR ETF (XLK, +1.0%) and its loss of 3.1% so far in 2026.
On Wednesday, the Cboe Volatility Index (VIX) retreated to 19.41 from 20.92 on Tuesday. The market’s “fear index” is up from 14.95 at the end of 2025, but has eased back into its “normal” range between 12 and 20.
At the closing bell, the tech-heavy Nasdaq Composite was up 0.8% to 22,753, the broader S&P 500 had added 0.6% to 6,881, and the blue chip Dow Jones Industrial Average was up 0.3% at 49,662.
