NVIDIA And Inflation Fears In This Week's Market Forecast

The market is coming off a relatively slow week and heading into what looks to be an eventful one. Stocks showed strength throughout the week but sold off sharply on Friday following a weaker consumer confidence report and growing fears of an economic slowdown due to tariffs and DOGE.

The spotlight this week is on NVIDIA, with $NVDA set to report earnings Wednesday after the bell. Investors aren't just looking for strong numbers—they'll be laser-focused on the company's guidance and Jensen Huang's outlook. Back in January, the release of China's DeepSeek large language model triggered a tech sell-off, sending Nvidia down 17% in a single session. Since then, sentiment has stabilized, but questions remain about the long-term impact on AI chip demand. Expect heightened volatility around the report, with guidance likely driving the stock's next big move.

Economic data was light last week, aside from Friday's disappointing consumer confidence report. This week, the main event is Core PCE, the Fed's preferred inflation measure, dropping Thursday morning. While I don't anticipate a major market shake-up, inflation has shown a persistent upward trend in recent CPI and PPI readings. Any upside surprise could keep rate-cut expectations in check.

With inflation fears bubbling up again, bearish sentiment has been creeping back into the market. Still, the S&P 500 is holding onto a 2.46% gain year-to-date. Meanwhile, the 10-year Treasury yield has continued its decline, down roughly 8% since mid-January. In my view, lower yields are a tailwind for equities and should help support further upside.

Volatility is likely to stick around, and I wouldn't rule out a short-term pullback of around 5%. That said, I see any significant dip as a buying opportunity rather than a cause for concern.

My advice? Focus on the positive and keep an optimistic outlook.

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