Weekend Update #266
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The U.S. stock market mounted a volatile relief rally Friday, as a landmark ruling by the US Supreme Court striking down President Donald Trump’s sweeping global tariffs overshadowed weak economic data and escalating geopolitical tensions. The S&P 500 rose 0.7% and the Nasdaq Composite gained 0.9%, snapping a five-week losing streak. Investors initially digested a softer-than-expected GDP print and persistent inflation pressures, but sentiment shifted abruptly after the Court’s 6–3 decision that the administration had exceeded its authority under the International Emergency Economic Powers Act (IEEPA). The potential for up to $170 billion in corporate tariff refunds fueled a broad-based advance, though gains faded late in the session after Trump responded by announcing plans for a new 10% baseline global tariff under Section 122 of the Trade Act of 1974.
Geopolitical risk also kept energy markets on edge. Trump signaled he is weighing a “limited military strike” on Iran, issuing a 15-day ultimatum to secure a revised nuclear agreement. The U.S. has deployed two aircraft carriers and additional air assets to the region, a buildup drawing comparisons to 2003. Oil prices held near six-month highs amid the heightened tensions. In a potential de-escalation, Iran said it agreed to the “principles” of a possible deal, with both sides preparing to exchange draft texts. Markets remain sensitive to the risk that a sustained conflict could disrupt supply, lift energy prices, and further complicate the inflation outlook ahead of midterm elections.
Economic data presents an increasingly complex picture for the Federal Reserve. Fourth-quarter GDP grew at a 1.4% annualized pace, missing forecasts as a prolonged government shutdown and cooler consumer spending weighed on activity. Inflation dynamics, however, remain unsettled. Year-ahead inflation expectations eased to 3.4%, but elevated “prices paid” metrics and persistent cost pressures led several Fed officials to suggest rate hikes remain possible if disinflation progress stalls. Consumer sentiment was unchanged at 56.6, highlighting a distinctly bifurcated, “K-shaped” economy: confidence improved among wealthier households benefiting from equity gains, while 46% of consumers said high prices continue to erode their finances. Manufacturing offered a rare bright spot, with factory output rising 0.6% in January—the strongest gain since early 2025—on a surge in domestic equipment orders.
In digital assets, enthusiasm around political alignment with crypto deepened following a high-profile Mar-a-Lago gathering hosted by the Trump family’s platform, drawing prominent Wall Street executives and reinforcing the asset class’s growing institutional acceptance. Still, broader risk appetite remains highly sensitive to macro headlines, rate volatility, and shifting policy signals.
Overall, markets are navigating a fragile equilibrium defined by tariff uncertainty, elevated geopolitical risk, resilient but moderating growth, and a Federal Reserve increasingly attentive to inflation upside. With AI spending under scrutiny, trade policy in flux, and oil prices firm, investors appear cautiously constructive—balancing supportive earnings expectations against persistent policy crosscurrents and heightened macro risk.
Friday’s Close (Weekly Performance)
S&P 500 6,909.51 (+1.10%)
Nasdaq 22,886.07 (+1.50%)
Dow Jones 49,625.97 (+0.30%)
Thank you Blue Room Senior Analyst Nick Peart.
Supreme Court Rules Against Tariffs
Blue Room Investment Team Bullpen
Friday, February 20, 2026
9:30 AM
Jared Fenley reviews the Supreme Court decision. Court rules 6 to 3 that The International Emergency Economic Powers Act, 91 Stat. 1626, does not authorize the President to impose tariffs.
Disclosure:
This video is for informational purposes only and does not constitute investment advice.
2026 02 03 Blue Room Investment Team Bullpen – PLTR Q4 2025 Earnings Review
Blue Room Investment Team Bullpen
Tuesday, February 3, 2026
9:30 AM
Monday, February 2, 2026: Nick Peart previews Palantir Q4 2025 earnings results.
Tuesday, February 3, 2026: Nick Peart reviews Palantir Q4 2025 earnings results.
Disclosure:
This video is for informational purposes only and does not constitute investment advice.
Consumer sentiment stagnated this month with very little change at 56.6, just 0.2 index points higher than January. All index components posted insignificant movements this month.
Overall, consumers do not perceive any material differences in the economy from last month. About 46% of consumers spontaneously mentioned high prices eroding their personal finances; readings have exceeded 40% for seven months in a row. Sentiment is about 13% below a year ago and 21% below January 2025.
That said, views vary considerably across the population. A sizable month-to-month increase in sentiment for the largest stockholders was fully offset by a decline among consumers without stock holdings. Similar divergences were seen across income and education, where higher-income or college-educated consumers exhibited increases in sentiment while lower-income or less-educated counterparts did not. With their much stronger income prospects and investment portfolios, wealthier and higher-income consumers feel better insulated from any possible risks to the economy.
2026 02 05 BLUE ROOM Investment Team Bullpen – F2026 Q2 Earnings Review
Blue Room Investment Team Bullpen
Thursday, February 5, 2026
9:30 AM
Nick Peart reviews Coherent Corp F2026 Q2 earnings results.
Disclosure:
This video is for informational purposes only and does not constitute investment advice.
Company Participants
Tony Xu — Chief Executive Officer
Ravi Inukonda — Chief Financial Officer
Weston Twigg — Investor Relations
Conference Call Participants
Andrew Boone — Citizens Bank
Bernie McTernan — Needham
Deepak Mathivanan — Cantor Fitzgerald
Eric Sheridan — Goldman Sachs
Josh Beck — Raymond James
Justin Patterson — KeyBanc
Justin Post — BofA
Ken Gawrelski — Wells Fargo
Lee Horowitz — Deutsche Bank
Lloyd Walmsley — Mizuho
Mark Mahaney — Evercore ISI
Michael Morton — MoffettNathanson LLC
Nikhil Devnani — Bernstein
Ross Sandler — Barclays
Shweta Khajuria — Wolfe Research
Youssef Squali — Truist Securities
Question-and-Answer Session
Shweta Khajuria — Wolfe Research
Thanks a lot for taking my questions. Let me try two, please. One is on competitive intensity globally and specifically in Europe, if you're seeing anything different, and if so, has it been rising?
And then the second is on investments. This may be for Ravi. There's a lot of maybe debate that's going on in terms of the level of investments not only in 2026, but to the degree that it may continue into 2027, especially as it relates to delivery platforms. So, could you please, Ravi, help us think through how we should think about it? Is it a one-time in '26 or should we expect some elevated level of spend in 2027 to because it could bleed into next year? Thanks a lot.
Tony Xu — Chief Executive Officer
Yeah. Hey, Shweta. I'll start by talking about Europe. Overall, we feel really great about our position in Europe. We're the leading player in many of the countries in that continent, and we're off to a really great start with our Deliveroo acquisition. And with respect to, we are growing much faster at the same profit contribution that we expected before the acquisition. We're gaining share in its largest markets. We're doing the same on the Wolt side.
And so when I look overall at our business outside of the U.S., what I see is faster growth than what we see in the US, which by the way, the US had two of the fastest growing quarters in 2025 in the last four years. So, that is actually quite impressive. And we're continuing to improve our unit economics across the board. So, I feel really strong about our position overseas.
Ravi Inukonda — Chief Financial Officer
Shweta, on your second point, right, like I'll make a couple of points. One, my expectation for the full-year EBITDA for '26 has not changed since the last call. The way I think about it is 2026 EBITDA margin is going to be up slightly compared to 2025, excluding Roo, and Roo produced about $200 million of EBITDA, like we said. So that remains very consistent.
Look, as we're thinking about investing, there's three major parts of investing that we called out. The quantum of investment dollars is also very similar to what I had expected at the time of the last call. One of the major areas of spend as you called out is our global tech stack. Look, we are happy with the progress. We're making good progress there. There are components of that spend that are redundant, especially as we take on the cost of running both tech stacks in parallel. Majority of that should be in '26, some of that will be in '27, which will come off, but that's a smaller component of the overall spend.
The other two areas are both Autonomy as well as Merchant services. We are expanding both of those areas. We are investing. We like what we are seeing there. If we continue to make more progress from a customer benefit perspective, our goal is to continue to invest more. So our goal has always been to maximize long-term free cash flow. We believe these investments are the right investments, especially as we think about becoming the operating system for local commerce. As we make more progress, we'll continue to invest behind them because ultimately, they'll lead to more areas where we can invest behind as well as improve overall free cash flow generation.
2026 02 19 – BLUE ROOM Investment Team Bullpen: DASH Q4 2025 Earnings Review
Blue Room Investment Team Bullpen
Thurs
day, February 19, 2026
9:30 AM
Jared Fenley previews (DASH) DoorDash's Q4 2025 earnings and then reviews actual results the following day.
Disclosure:
This video is for informational purposes only and does not constitute investment advice.
2026 01 30 BLUE ROOM Investment Team Bullpen – SOFI 2025 Q4 Earnings Review
Blue Room Investment Team Bullpen
Thursday, January 30, 2026
9:30 AM
Jared Fenley reviews SoFi's Q4 2025 earnings results, which came in well ahead of expectations.
Disclosure:
This video is for informational purposes only and does not constitute investment advice.
2026 02 17 BLUE ROOM Investment Team Bullpen – COIN 2025 Q4 Earnings Review
Blue Room Investment Team Bullpen
Tuesday, February 17, 2026
9:30 AM
Nick Peart reviews (COIN) Coinbase's Q4 2025 earnings results, which came in well ahead of expectations.
Disclosure:
This video is for informational purposes only and does not constitute investment advice.
2026 02 11 BLUE ROOM Investment Team Bullpen – SHOP 2025 Q4 Earnings Review
Blue Room Investment Team Bullpen
Wednesday, February 11, 2026
9:30 AM
Jared Fenley reviews (SHOP) Shopify's Q4 2025 earnings results, which came in well ahead of expectations.
Disclosure:
This video is for informational purposes only and does not constitute investment advice.
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2026 02 17 BLUE ROOM Investment Team Bullpen – SHOP 2025 Q4 Earnings Review
Blue Room Investment Team Bullpen
Tuesday, February 17, 2026
9:30 AM
Nick Peart reviews (ROKU) Roku's Q4 2025 earnings results, which came in well ahead of expectations.
Disclosure:
This video is for informational purposes only and does not constitute investment advice.
2026 02 17 BLUE ROOM Economics Desk: CPI Release – January 2026
Blue Room Investment Team Bullpen
Wednesday, February 11, 2026
9:30 AM
Jared Fenley reviews January 2026 CPI Data.
Disclosure:
This video is for informational purposes only and does not constitute investment advice.
2026 02 19 – BLUE ROOM Economics Desk: Initial Jobless Claims
Blue Room Investment Team Bullpen
Thursday, February 19, 2026
Contents:
Nick Peart reviews Initial Jobless Claims
2026 02 17 BLUE ROOM Investment Team Bullpen – ANET 2025 Q4 Earnings Review
Blue Room Investment Team Bullpen
Tuesday, February 17, 2026
9:30 AM
Nick Peart reviews (ANET) Arista Networks Q4 2025 earnings results.
Disclosure:
This video is for informational purposes only and does not constitute investment advice.
2026 02 20 BLUE ROOM Economics Desk: Gross Domestic Product
Blue Room Investment Team Bullpen
Friday, February 20, 2026
9:30 AM
Economics Desk: Nick Peart reviews the GDP report.
Disclosure:
This video is for informational purposes only and does not constitute investment advice.
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