Major indices are higher and recovering some of yesterday's losses. The gains are supported by some “buy-the-dip” action across yesterday's laggards, which include mega-caps and Technology (XLK) names.

Currently, Consumer Discretionary (XLY) and Technology sit atop the leaderboard following yesterday’s weakness. Some of yesterday’s tariff-affected names are rebounding strongly in the Consumer Discretionary sector, such as Williams-Sonoma (WSM) and Nike (NKE). In the Technology sector, software names are also reclaiming some ground (more below) and news of a partnership between Advanced Micro Devices (AMD) and Meta Platforms (META) are helping semiconductors.

Software stocks are rebounding after news AI startup Anthropic has entered into partnership with many software companies, including LSEG (LSEG), FactSet (FDS), Salesforce (CRM) and DocuSign (DOCU), to develop so-called “plug-ins” that could help with investment baking, wealth management, and HR tasks.

Economic Data

The FHFA House Price Index in December rose 0.1% after an upwardly revised 0.7% increase in November, economists were expecting a 0.3% increase. Prices increased 1.8% in the 12 months through December, after climbing 2.1% in November.

Richmond Fed Non-Manufacturing Survey showed local business conditions slowing in February to -10 from -6 in January, pointing softness in the 5th District services sector. 

Highlights:

• Capex fell to -9 vs. -5 prior
• Revenues fell to -8 vs. -3 prior
• Demand declined to -3 vs. +2 prior
• Employment down to 0 vs. +5 prior 

Consumer Confidence rose to 91.2, up from a revised 89 and beating consensus of 86.9. This was driven by surging optimism for the future. The Expectation Index rose by 4.8 points to 72, while the Present Index declined by 1.8 to 120.

The countdown to Nvidia's (NVDA) earnings begins, set to report after the bell tomorrow. The release could renew faith in the AI trade, or add to it. We believe it will be a beat-and-raise, as the company still has pricing power.