10 Key Insights for the Stock Market on Monday

The stock market is looking to open higher this Monday after experiencing a 1% drop in the S&P 500 on Friday, driven by growing concerns over tariffs and a declining consumer sentiment index. All major indices, including the S&P 500, Nasdaq, and Dow, come off modest losses from the previous week. This week, the earnings calendar is light, but investors can look forward to results from DuPont, a member of the investment Club, scheduled for Tuesday morning.

Steel Tariffs Impact

Nucor Corporation and other steel manufacturers have seen their stock prices soar in premarket trading following an announcement from President Donald Trump. He expressed intentions to impose a 25% tariff on steel and aluminum imports, which is likely to positively impact domestic producers. Nucor, based in North Carolina, has already been featured on the Club's watchlist.

Nvidia's Earnings Outlook

In anticipation of the upcoming earnings report on February 26, Evercore ISI has placed Nvidia on its "Tactical Outperform" list. Analysts see the recent decline in Nvidia's stock price, attributed to concerns regarding its DeepSeek technology, as a potential buying opportunity. The firm has maintained a price target of $190 per share for Nvidia.

McDonald's Quarterly Results

Fast-food giant McDonald's reported quarterly sales that fell short of Wall Street expectations, although earnings per share met consensus estimates. Despite a slight dip in the U.S. market, same-store sales rose by a better-than-expected 0.4%, contributing to a greater than 1% increase in McDonald's stock in premarket activity.

Home Depot Stock Boost

Following a positive outlook, JPMorgan raised the price target for Home Depot to $475 from $450 and included the stock on its "Analyst Focus List." The firm anticipates that Home Depot's comparable store sales in the U.S. will improve by 1% for the quarter, contrasting with a consensus estimate of a 2.4% decline. Walmart also saw its price target increase to $112 from $97.

Merck Downgrade

TD Cowen has downgraded Merck, cutting its rating from buy to hold and reducing its price target from $121 to $100. The downgrade follows a lack of clarity regarding the HPV vaccine Gardasil, coupled with concerns over Merck's business development strategy and the impending loss of exclusivity for its key cancer treatment, Keytruda.

Johnson Controls Upgrade

UBS upgraded Johnson Controls to a buy rating, citing optimism surrounding the appointment of the new CEO, Joakim Weidemanis, who is set to take over next month. Analysts predict that following a company restructuring, Johnson Controls will benefit from favorable market conditions in areas such as HVAC and fire safety.

Palo Alto Networks Performance

Barclays expressed confidence in Palo Alto Networks heading into earnings reports later this week, expecting improved performance in key metrics such as bookings and annual recurring revenue. After suffering prior downgrades, the stock has rebounded nearly 7% since the start of the year.

Kraft Heinz Neutral Rating

Kraft Heinz has been downgraded from a buy to a neutral rating by Mizuho Securities, as the packaged food sector continues to face challenges. The company's stock has declined by 18.5% over the past year.

Shopify Upgrade Ahead of Earnings

Benchmark has upgraded Shopify from hold to buy in anticipation of the company's earnings report scheduled for Tuesday morning. Analysts expect the e-commerce provider to exceed projections on gross merchandise value.

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