.custom-style { | Thursday, February 29

Here's Everything You Need To Know Today

Despite premarket action indicating a sharp selloff, markets are pushing a little higher after a key piece of inflation data came back exactly in line with expectations. The Personal Consumption Expenditures index showed that inflation cooled ever-so-slightly to 2.8%. The PCE is the inflation figure the Federal Reserve pays the most attention to. Since the Fed’s goal is to keep inflation around 2%, this result is really encouraging. Now, the market can be a little less fearful about interest rates moving forward.

More importantly, there are signs that the wider market is maturing as we move through this rally.

After 5 months of upward momentum—we’re finally seeing some dents in the AI narrative. Our analysts have had a blast covering tangential AI-enabling stocks that stand to benefit immediately from brands heavily investing in LLM infrastructure.

The only trouble was—there seemed to be no upward limit to the upside for some of these AI enablers. They would post ludicrous guidance and then beat expectations just three months later. Our number one concern in markets like this is making sure we don’t lean too hard into the euphoria—just in case that bull sentiment pushes all the way into bubble territory.

So, we were really encouraged today when stocks like Snowflake and Salesforce took a bit of a haircut on guidance concerns. Snowflake is more of an AI enabler than Salesforce—but they’re both benefiting from and adding to the category. Sell pressure there spread to big players like Nvidia and AMD before inflation data printed, which helped confirm that the market is reevaluating the AI opportunity. We love to see price moves like this because it helps prove that The Street hasn’t gone fully manic in the run-up to potential rate cuts.

With some parts of this rally still running pretty hot, we’re still weighing concerns that this is a ‘melt-up’ scenario where traders frantically buy across a few quarters and then pull back even harder. Today’s brief reality check helps us stay confident that overarching bull conditions can last.

Either way, there’s a wild spread of dynamics hitting the market in early trading. Let’s break down the big trends and try to make sense of what’s coming.


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