Investors Cautious as Fed Holds Tight, Stock Valuations Soar

On February 18, the S&P 500 index rose 0.24%, the Dow Jones Industrial Average increased by 0.02%, and the Nasdaq Composite index gained 0.07%. In macroeconomic news, Federal Reserve Bank of San Francisco President Mary Daly emphasized the need for the central bank to maintain a tight monetary policy until there is sustained progress in reducing inflation. Meanwhile, a Bank of America survey found that 89% of global fund managers believe U.S. stock valuations are excessively high, the highest level since April 2001.

Based on the market performance, the Utilities, Technology, Consumer Staples, Energy, Materials, Industrials, Real Estate, and Financials sectors outperformed the S&P. The Utilities, Technology, Energy, Materials, Industrials, and Financials sectors showed exceptional performance. Conversely, the Healthcare, Consumer Discretionary, and Communication Services sectors underperformed the S&P.

Palantir and Oracle led the tech sector higher on Tuesday, with Palantir's AI expansion and commercial market growth fueling a 4.58% surge in its stock price. Oracle also rose 3.24% after Jefferies increased its price target, indicating confidence in the company's future growth. In the healthcare sector, Novo Nordisk saw a 5.73% increase in its share price, driven by high demand for GLP-1 drugs, particularly Ozempic and Wegovy. Meanwhile, HSBC Holdings hit a 20-year high, rising 3.25% ahead of its annual results, reflecting strong market confidence. However, UnitedHealth Group bucked the trend, falling 4.35% after Empire Life Investments Inc. reduced its stake in the company.

GCL Global surged 145.97% today, following the successful completion of its business combination with RF Acquisition Corp, which boosted investor confidence. Energy Focus Inc. also saw a significant rise of 110.85%, likely driven by positive sentiment from new partnerships and increased demand. However, not all companies fared well. INLF dropped 79.24% amid regulatory scrutiny over its accounting practices, while Bio-Path Holdings fell 66.84% and is set to be delisted from Nasdaq.

Federal Reserve's Daly emphasized the need to maintain tight monetary policy until there is sustained progress in reducing inflation, indicating caution before any adjustments. Meanwhile, a Bank of America survey revealed that 89% of investors believe that U.S. stock market valuations are too high, marking the highest level of concern since at least April 2001. Additionally, Tesla announced the official start of production for the revamped Model Y at its Shanghai Gigafactory, with deliveries expected to begin later this month. This model will be available for a limited time, with specific pricing for different versions. Lastly, Apple reported a fault in its iCloud services, affecting some users' access and verification processes.