US Stocks Navigate Choppy Waters: Inflation Cools, Amazon Slides
US stock markets ended the week on a mixed note, despite encouraging inflation data. The S&P 500 fell 1.39%, the Nasdaq 100 lost 1.37%, and the Dow Jones closed 614 points lower (1.23%). This came after January’s inflation report revealed a slowdown, with headline inflation dropping to 2.4% year-over-year – the lowest since May 2025. Core inflation likewise eased to 2.5%, its lowest level since March 2021.
Inflation’s Impact and the Fed’s Next Move
The cooler inflation reading, alongside softer retail sales data, has strengthened expectations that the Federal Reserve may begin cutting interest rates. Currently, the market anticipates approximately 59 basis points of Fed cuts in 2026, with the first 25 basis point move almost fully priced in for June, followed by another in October.
Amazon’s Prolonged Losing Streak
While broader markets grappled with uncertainty, Amazon experienced a particularly challenging week, with its stock closing lower on Friday at $198.79 (0.41%). This marked the ninth consecutive daily decline, the longest losing streak for the company since July 2006. The sell-off stems from investor concerns regarding Amazon’s planned capital expenditure of $200 billion for 2026, significantly exceeding Wall Street’s expectations of around $150 billion.
Amazon’s stock has now fallen 23% from its November high of $258.60, approaching a multi-month trendline support near $191.
Economic Data on the Horizon
US stock markets are closed today, February 16, 2026, for Presidents’ Day. The distribution of ‘Sizeable Lovely Bill’ tax refunds is expected to begin this week, with some hoping this will provide a boost to tech stocks.
Q4 GDP Growth Rate Anticipated
The US economy expanded at an annualised rate of 4.4% in the third quarter of 2025, its strongest growth in two years. However, the 43-day US government shutdown last year is expected to significantly impact the upcoming Q4 GDP release, with projections falling towards 3%. The Atlanta Fed’s GDPNow estimate, updated February 10, 2026, currently projects a slightly stronger 3.7% annualised rate for Q4.
Earnings Season Continues
The US earnings season continues with reports expected from DoorDash, Coca-Cola, Walmart, Deere & Company, and Dropbox before NVIDIA releases its results on February 26.
Looking Ahead: Key Takeaways
Despite the recent cooling of inflation, US markets remain sensitive to economic data and corporate announcements. Amazon’s situation highlights the importance of capital expenditure plans and investor expectations. The upcoming GDP data and earnings reports will be crucial in shaping market sentiment in the coming weeks.
Did you realize?
The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a basket of goods and services.
FAQ
Q: What is the current inflation rate?
A: January’s inflation rate was 2.4% year-over-year.
Q: Why is Amazon’s stock falling?
A: Investors are concerned about Amazon’s planned $200 billion capital expenditure for 2026.
Q: What is the Federal Reserve expected to do?
A: The market anticipates the Fed may begin cutting interest rates, with the first cut potentially in June.
Q: What is GDP?
A: GDP, or Gross Domestic Product, is a measure of the total value of goods and services produced in a country.
Pro Tip: Keep a close eye on upcoming economic data releases, such as the Q4 GDP growth rate, as they can significantly impact market movements.
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