MarketWatch: “Do stock-market investors care more about Nvidia than the Fed? Inflation data will provide a test.”

Excerpt from MarketWatch quoting DataTrek co-founder Nick Colas:

.... "The S&P 500 was up 6.7% for the year to date through Thursday, with just five trading days accounting for that gain, noted Nick Colas, co-founder of DataTrek Research, in a note.

That includes Thursday’s 2.1% rise, driven by Nvidia’s earnings, and four days with gains of 1% to 1.4%, including a Jan. 8 rise following an announcement of new chips by Nvidia; a Jan. 19 gain led by chip stocks following earnings guidance from Taiwan Semiconductor ; a Feb. 1 bounce following a selloff inspired by remarks from Powell; and a Feb. 2 rally driven by Meta Platform Inc.’s 20% surge.

The lesson is that the market is shrugging off the prospect of interest rates remaining higher for longer to focus on Big Tech’s earnings leverage, Colas wrote. “This is classic ‘midcycle’ market behavior. Investors can live with higher interest rates if (but only if) there is a promising development in an important sector.”

Full article here on MarketWatch.