Against the backdrop of escalating tensions in the Middle East, the US stock market enters a critical week: retail giants' financial reports will test American consumer strength, and whether non-farm data can ease the "red light" warning.

Notice that the S&P 500 index closed at 6878.88 points last Friday, with a cumulative decline of about 0.5% for the whole week, but the benchmark index still maintained a rise of about 0.5% for the year. The tech-heavy Nasdaq Composite index fell 0.9% last week and has fallen about 2.5% since 2026. Despite NVIDIA Corporation (NVDA.US) reporting explosive earnings on Wednesday, it failed to ease market concerns about ongoing turbulence in artificial intelligence. Meanwhile, a new round of sell-offs related to private credit indicates that the financial sector is still under tremendous pressure. Key Points for the Week Ahead In next week's economic data calendar, the highlight will be the February jobs report released on Friday. In addition, key earnings from chip manufacturer Broadcom Inc. (AVGO.US) will also be closely watched. The political uncertainty surrounding GEO Group Inc remains a focus for investors, as the US and Israel launched attacks on Iran over the weekend. With expectations of a decline in the aviation and other consumer sectors, market focus is shifting to energy and defense companies as potential safe havens. Amid escalating tensions in the Middle East, safe-haven sentiment rose on Monday, with gold and silver prices surging. Spot gold rose to $5,374 per ounce, up 1.8%; spot silver was at $96 per ounce, up 2.6%. International oil prices soared $8 at the Monday open, with disruptions in oil transport due to the US-Iran conflict. Brent crude reached a high of $82.37 per barrel, while WTI crude jumped to $80.82 per barrel. Economic Data and Corporate Trends The February jobs report on Friday will be the focus. Wall Street economists expect the US economy to have added 60,000 jobs last month, down from the 130,000 added in January. January's report easily exceeded expectations, largely dispelling concerns about an imminent slowdown in the US economy. Investors will also receive manufacturing data from S&P Global, Inc. and the Institute for Supply Management (ISM) on Monday, ADP employment data on Wednesday, and weekly initial jobless claims on Thursday. In the corporate sector, investor attention will be divided between "AI trading" and the state of US consumer spending. Following the disappointing NVIDIA Corporation earnings report on Wednesday, Broadcom Inc. will provide another window into AI demand. Marvell (MRVL.US) will also report earnings on Thursday. In the retail sector, Target Corporation (TGT.US) on Tuesday and Costco (COST.US) on Thursday will lead the earnings week for big-box retailers and grocery stores, with other companies reporting including Ross Stores (ROST.US), Kroger Co. (KR.US), BJ's Wholesale Club (BJ.US) and Macy's, Inc. (M.US). "Risk rather than opportunity" NVIDIA Corporation once again exceeded analysts' expectations for revenue and adjusted earnings on Wednesday. CEO Jensen Huang talked extensively about the soaring demand for NVIDIA Corporation chips during the earnings call, and the company also raised guidance. However, this was not enough for investors. The day after the earnings report (Thursday) saw NVIDIA Corporation's stock price fall by about 4.8%, and it fell another 4% on Friday, with a total weekly decline of over 6%. Other stock markets also declined, with all three major indices closing lower on Thursday and Friday. Capital analyst Kyle Roda wrote in a client report that the problem with NVIDIA Corporation was that investor sentiment towards AI trading has changed. Roda said that despite valid concerns about potential supply constraints, "in every respect, NVIDIA Corporation's fourth-quarter numbers were flawless." Roda wrote, "The signal here is that despite outstanding performance, the market is undergoing an increasingly entrenched emotional and behavioral shift. AI is being seen as a risk rather than an opportunity, and in a market plagued by concerns of valuation and overinvestment, investors are more focused on avoiding losers than picking winners." Roda's argument points directly to the "AI panic trade." Citrini Research, an investment firm, released a report last Monday and Tuesday that sparked widespread discussion, envisioning a future scenario where white-collar workers are massively replaced. Stocks mentioned in the report subsequently plunged - IBM suffered one of its worst declines since 2000, and Zscaler (ZS.US) fell nearly 10% for the week. Bank of America strategists argued in a client report on Friday that the reality described in the Citrini report is "logically inconsistent and seriously contrary to sound economic theory." Why then did it trigger a sell-off? Analysts wrote, "The answer lies in a combination of crowded positions and multiple equilibria, similar to a bank run triggered by baseless bankruptcy rumors." Is the labor market signaling a "red flag"? In his State of the Union address on Tuesday evening, President Trump stated, "More Americans are working today than at any time in our country's history." However, this dynamic may not necessarily reflect the current state of the labor market. The last time the Bureau of Labor Statistics (BLS) released its monthly employment report, investors were greeted with an unexpectedly strong performance: a gain of 130,000 jobs, double the consensus expectation of 65,000. Strategists at BNP Paribas wrote in a recent client report that the difference between expected and reported values in January makes the February report crucial. Economists once again predict the US economy will add 60,000 jobs in February. Strategists say that if the data for February shows strong performance again, "such data could decisively quell the narrative that 'the labor market is flashing red lights' and 'labor market slack is accumulating rapidly.'" While the headline figure of 130,000 new jobs added in January may seem optimistic, revisions to data from 2025 show that employers were only adding an average of 15,000 jobs per month last year. According to the Job Openings and Labor Turnover Survey (JOLTS) by the BLS, job openings fell for the fourth consecutive month in December, with little overall change in vacancies. Neal Richardson, chief economist at ADP, said in an interview last Thursday, "This labor market feature is more subdued than vibrant. It is very unusual to see employers exhibit this degree of caution." Any changes in the jobs report and unemployment rate could potentially sway interest rate policy based on the data outcome. This week's data will be the last batch of reference material that Federal Reserve officials will receive before the "quiet period" leading up to the March 17-18 meeting. BNP Paribas strategists wrote, "A strong February report could lead the Federal Open Market Committee (FOMC) to shift its base expectations for 2026 from 'cutting rates once' to 'not cutting rates, and even possibly to raise rates in 2026. However, the downside risks may be underestimated." As of last Friday, traders estimated a 94.2% likelihood that the Federal Reserve will keep rates unchanged in the target range of 3.5% to 3.75% after the March meeting.