To The Moon

We saw the major U.S. equities indices experiencing some fluctuation during the Tuesday’s session before it ended higher to some small gains after the first market session after the Presidents Day.

We might be seeing some hints on where the Federal Reserve's policy would be heading with the minutes from the central bank's most recent meeting set for release and several officials scheduled to deliver comments. We are also seeing some reports from big names including retail giant $Wal-Mart(WMT)$

S&P 500 managed to gain modestly 0.24% to a record closing high, while DJIA and NASDAQ ended with a very minimal gains of 0.02% and 0.07% respectively.

S&P 500 Sector Only Saw Three In The Red

Communication services sector was down by 1.26% due to more than 2% loss by $Meta Platforms, Inc.(META)$ and $Netflix(NFLX)$.

The Healthcare sector loss of 0.26% was due to the heaviest losses in the S&P 500 by shares of Medtronic (MDT), which tumbled more than 7% after the medical device maker posted mixed results for its fiscal third quarter. Although adjusted earnings per share edged out estimates, quarterly revenue missed the mark, with slumping sales of Medtronic's stapling and blood oxygen management products weighing on its performance. Shares of health insurance giant UnitedHealth Group (UNH) sank 4.4% after the Federal Trade Commission said it would retain the Biden administration's guidelines for reviewing mergers. The application of these existing rules could lead to obstructions for the planned acquisition of home and hospice care provider Amedisys (AMED) by UnitedHealth's Optum division.

Information Technology sector managed to gain 0.55%, thanks to shares of Super Micro Computer (SMCI) which rose more than 16%, adding the most of any S&P 500 stock and extending a string of gains posted since the sever manufacturer provided a business update last week.

In addition to forecasting robust revenue growth in fiscal 2026, Supermicro asserted confidence that it will be able to meet the Feb. 25 deadline for filing its delayed annual report. If the company is unable to complete the regulatory requirement by that date, Supermicro stock could face delisting.

Note Yield Higher

As investors await the FOMC meeting minutes later this week, U.S. Treasury yields were higher on Tuesday after a day’s holiday. At the same time, investors are also digesting a bond sell-off in Europe.

The 10-year Treasury yield gained 8 basis points at 4.556%, while the 2-year Treasury yield advanced more than 4 basis points at 4.308%. One basis point is equivalent to 0.01%, and yields share an inverse relationship with prices. The move higher comes after European bond yields increased significantly Monday on expectations that countries across the region will hike their defense spending.

Stocks To Watch

The Wall Street Journal indicated that chipmaking rivals $Taiwan Semiconductor Manufacturing(TSM)$ and $Broadcom(AVGO)$ could be pursuing deals that would split US semiconductor giant Intel (INTC). According to the report, Broadcom has been contemplating an acquisition of Intel's semiconductor design and marketing business, while TSMC has been exploring the possibility of taking over some or all of Intel's manufacturing facilities. Intel shares rose about 16%.

Because of this news, Intel have managed to show strong momentum from RSI above in the overbought zone, and share price have crossed the 200-day period, this could mean that the Intel bulls are in control now, as they could be pushing for a new highs this week.

Walgreens Boots Alliance (WBA) shares surged 14% following reports on CNBC that the pharmacy operator may still be considering a sale to private equity firm Sycamore Partners. According to the financial network, the potential transaction to take Walgreens private appeared to be shelved a few weeks ago, but there could be renewed momentum behind a deal.

Summary

I think there might be rotations to small-cap and mid-cap while the market grapple with what the tariffs on chips would have impact on tech stocks, namely the cloud providers, chips maker as well as software companies that are relying on the technology offered by the chips maker.

I would be monitoring closely on Nvidia as its earnings on 26 Feb would show how they planned to respond to the tariffs challenge and risk.

Appreciate if you could share your thoughts in the comment section whether you think market could continue in a mixed mode while small cap rotation happen.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.