"Tech Stocks Tumble as Economic Fears Mount; Nvidia Earnings Loom"

Stocks opened in the red on Tuesday, with the S&P 500 and Nasdaq Composite indexes down 0.4% and 1.2% respectively at 2 pm ET. Big Tech and crypto stocks were not immune, with the Bloomberg Mag7 Index, which equally weights seven of the largest companies, down almost 3% midway through the session. Nvidia, on the eve of reporting its fourth quarter earnings, was down 1.9% at 2 pm ET. Coinbase and MicroStrategy were down 7.2% and 12.1% respectively at that time.

The decline in stocks can be attributed to two main factors: investor concerns about economic growth and the potential resumption of previously paused tariff plans. A report by The Conference Board showed that consumer confidence in February fell by the most since August 2021, with a reading below 100 indicating a pessimistic economic outlook. Additionally, President Trump stated that levies against Mexico and Canada are "on schedule," signaling a potential resumption of tariff plans that were previously paused.

Looking ahead, the big market movers this week will be Nvidia's earnings report and the release of Personal Consumption Expenditures (PCE) data. Nvidia, once considered the golden child of AI, has faced headwinds this year, with DeepSeek, a Chinese AI firm, spooking investors and pulling almost $600 billion out of Nvidia last month. However, Nvidia has been able to pare most of the losses, and shares were down only 6% midway through Tuesday's session.

Option chain data suggests that many traders remain optimistic about Nvidia's prospects, with calls hitting $145 to $160. Shares were trading at $128 at 2 pm ET. Nicholas Colas, co-founder of DataTrek Research, advises keeping an eye on the CBOE Volatility Index (the VIX) for indications of future stock moves. A VIX value at or above 27.3 indicates heightened volatility, and historically, stocks tend to perform well after volatility spikes. The VIX is currently hovering around 19, but a bigger selloff in big tech or disappointing inflation data could send the VIX higher.