Wall Street Daily (February 26): US stocks rose on Wednesday, market sentiment continued to recover, large-cap tech stocks performed strongly, NVIDIA's post-market earnings exceeded expectations; capital flowed back into crypto assets, Bitcoin surged

Summary: US stocks rose across the board on Wednesday, with the S&P 500 Index up 0.81%, Nasdaq Index up 1.26%, Dow Jones Index up 0.63%, and Russell 2000 Index up 0.41%. Large-cap tech stocks performed strongly, with the technology sector becoming the core force driving the broader market upward, as market risk appetite improved. NVIDIA's post-market results and guidance exceeded expectations, partially easing AI-related concerns. Uncertainty over tariffs remains, and the market remains cautious about potential impacts on supply chains and costs, but strong earnings and demand expectations offset related disruptions, allowing risk assets to continue their rebound overall. In terms of major asset classes, the US Dollar Index fell by 0.24%, gold rose by 0.76%, crude oil dropped by 0.77%, and Bitcoin surged by 6.13%, with sentiment in crypto assets also improving.

I. Major Events

1. Trump announces new tariff arrangements

The White House announced a new tariff arrangement to replace the previous plan that was overturned by the Supreme Court, leading to heightened policy uncertainty. While the market continues to trade on earnings and growth expectations, it has no choice but to factor in risk premiums for potential impacts on supply chains and costs. This 'coexistence of bullish factors and noise' pattern is helping sentiment recover, though sensitivity to policy variables remains high.

2. NVIDIA’s earnings and guidance exceed expectations

The company reported FY2026 Q4 revenue of approximately $68.1 billion, data center revenue of about $62.3 billion, and full-year revenue of approximately $215.9 billion, while providing guidance of around $78 billion for the next quarter. The strong performance and guidance reinforce the certainty of demand for computing power and AI-driven growth, leading to a recovery in market confidence in growth sectors, with technology stocks becoming the leading gainers of the day.

3. Surge in US crude oil inventories weighs on oil prices

EIA data showed a weekly surge of approximately 16 million barrels in US crude oil inventories, a slight decline in gasoline inventories, and a small increase in distillate inventories. The bearish inventory structure has left oil prices lacking sustained momentum for a rebound, pressuring energy-related assets in the short term and weighing on the overall performance of the commodities sector.

II. Major Trends

Small-cap stocks continue to outperform. Over two weeks and three months, IWM rose 3.43% and 13.73%, respectively, significantly outpacing SPY's three-month gain of 3.60%, reflecting continued investor preference for economic resilience and higher risk premiums in small- and mid-cap stocks. Market breadth also improved, with RSP rising 10.58% over three months, again surpassing SPY's 3.60% gain during the same period, indicating that gains are no longer overly reliant on a few heavyweight stocks, as more components are beginning to contribute returns.

In terms of style, value continues to dominate, with SPYV gaining 7.52% over three months, significantly higher than SPYG's 0.26%, showing that the divergence between growth and value remains unresolved. Meanwhile, short-term volatility among tech giants has increased, with MAGS retreating 1.96% over two weeks, signaling that while the AI-driven rally remains robust, internal divergences are intensifying, with funds increasingly concentrating in higher-certainty targets.

III. Market Sentiment

Overall sentiment continues to improve, with the VIX dropping to 17.93, down 8.29% on the day, and risk premiums significantly narrowing. The CNN Fear & Greed Index rose to 46, up slightly from 43 on the previous trading day, indicating that the market remains in a 'cautious recovery' zone and has not yet entered an obvious state of exuberance.

From a structural perspective, market breadth data (from the previous trading day) showed new highs/lows for the S&P at 41/18 and for the Nasdaq at 67/264, indicating that divergences have not fully subsided. On the options front, the latest available CBOE total Put/Call ratio was approximately 0.88 (as of February 13), reflecting generally positive risk appetite, though due to data lag, its relevance is more trend-based than indicative of short-term movements.

IV. Market Scan

1. Index ETFs

Driven by heavyweight tech stocks, the Nasdaq ETF QQQ rose 1.45%, outperforming major index ETFs. The small-cap ETF IWM gained 0.47%, a relatively moderate but sustained recovery, showing that funds remain willing to allocate towards higher-elasticity areas, albeit at a more measured pace.

2. Sector Performance

The technology sector XLK rose 1.92%, strengthened by the recovery in AI-driven sentiment and supported by earnings expectations. The financial sector XLF gained 1.75%, with improving risk appetite driving capital inflows and enhancing the market’s pricing of a 'soft landing.' By contrast, the defensive consumer staples sector XLP fell 0.81%, reflecting a shift toward more offensive positioning, leaving defensive sectors temporarily lagging. Overall, sector divergence was not extreme, but the tilt of capital toward heavyweight sectors became more pronounced.

3. The Magnificent Seven Tech Stocks

Netflix (NFLX) surged 5.97%, driven by M&A news that fueled market expectations for changes in the streaming competition landscape. Microsoft (MSFT) rose 2.98%, supported by continued optimism around its AI initiatives and cloud business outlook. Meta gained 2.25%, showing resilience amid improving risk appetite. Google (GOOG) edged up only 0.68%, underperforming compared to peers during a broad-based rally, as funds favored stronger performers.

4. Chinese Equities

Futu (FUTU) climbed 5.38% after the company announced it would release its Q4 and full-year 2025 earnings on March 12, with the event acting as a short-term catalyst. Tencent Music (TME) fell 1.54%, showing weakness due to a lack of new drivers. Overall, Chinese stocks exhibited greater divergence on the day, with trading focusing more on high-conviction events.

5. Cryptocurrencies and Related Stocks

The latest Bitcoin quote surpassed $68,000, closing the day with a 6.13% gain as capital flowed back into crypto assets amid a recovery in risk appetite. Mining firm Riot (RIOT) rose 3.52%, tracking Bitcoin's rebound. Circle (CRCL) soared 35.47% after disclosing robust Q4 and full-year 2025 results, with strong performance in USDC circulation and profitability data driving concentrated inflows of capital.

$NASDAQ 100 Index (.NDX.US)$ $Invesco QQQ Trust (QQQ.US)$ $Dow Jones Industrial Average (.DJI.US)$ $State Street® SPDR® Dow Jones Industrial Average® ETF Trust (DIA.US)$ $Russell 2000 Index (.RUT.US)$ $iShares Russell 2000 ETF (IWM.US)$ $Roundhill Magnificent Seven ETF (MAGS.US)$ $USD (USDindex.FX)$ $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $XAU/USD (XAUUSD.CFD)$ $CBOE Volatility S&P 500 Index (.VIX.US)$ $Bitcoin (BTC.CC)$ $BTC/USD (BTCUSD.CC)$ $Ethereum (ETH.CC)$ $ETH/USD (ETHUSD.CC)$ $iShares Ethereum Trust ETF (ETHA.US)$ $NVIDIA (NVDA.US)$ $Tesla (TSLA.US)$ $Meta Platforms (META.US)$ $Amazon (AMZN.US)$ $Alphabet-C (GOOG.US)$ $Microsoft (MSFT.US)$ $Apple (AAPL.US)$

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