Good Morning Investors!!! Stocks bounced back Tuesday on another wave of AI confidence, and today’s big question is whether Nvidia’s earnings keep that good mood going. The S&P 500 rose 0.8% and the Nasdaq gained 1.0%, while overseas markets were mostly higher too. At the same time, the 10-year yield sat near 4.05% and oil stayed firm around $66, so rates and energy are still part of the story. We’ve got an oil inventory update this morning, a Treasury auction this afternoon, and jobless claims tomorrow, plus a fun subplot: AI demand is spilling into “real world” gear like heavy machines and power equipment, and even into legal tech after Thomson Reuters’ AI tool hit 1 million users.
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Key Market Drivers
AI bounce lifts Tuesday’s close, Nvidia is the next test: US stocks bounced back Tuesday, with the S&P 500 up 0.8% to 6,890.07 and the Nasdaq up 1.0% to 22,863.68 at the close. The spark was another burst of AI optimism, helped by chip names after AMD said it signed a multi-year deal to supply Meta with AI chips. Because big tech is a large slice of the S&P 500, a good or bad AI signal can swing the whole market and shift valuations, the price people pay for earnings. Chip makers often move first, so the next tell is Nvidia’s report after today’s close, with forecasts for profit up about 62% and revenue up about 68%. 
S&P 500 1 Year Chart, Feb 25, 2026
Overseas stocks push higher as chips and banks lead: Overnight, the Nikkei jumped 2.2% to 58,583.12, and Europe’s STOXX 600 was up 0.47% at 632.08 as of 6:30 AM ET. Chip-heavy markets led again after new AI partnerships calmed disruption fears, while banks also helped after HSBC beat expectations and its shares rose 5.1% on a higher earnings target. That kind of broad, risk-taking mood, with a widely tracked world stock index up 0.3% in early trading, often gives US stocks a tailwind at the open, especially for tech and financials. Watch to see whether the Nikkei holds its new high and whether Europe’s banks stay in the driver’s seat once US trading gets going. Rates and the yen move as traders re-price the risk map: Treasury yields ticked higher ahead of Nvidia, with the 10-year Treasury yield, a key long-term interest rate, at 4.05% as of 6:30 AM ET, up about 0.02 percentage points. In currency markets, the dollar bought about 156.10 yen after Japan’s longest bond yield jumped, with the 40-year yield up 0.10 percentage points to 3.615%. Even small rate moves can matter because higher yields raise borrowing costs and can make future profits look worth a bit less today, which tends to pinch fast-growing tech stocks first but can help banks. The next check is simple: watch whether the 10-year stays near 4.05% and whether dollar-yen keeps pressing above 156 after Nvidia reports tonight. Oil and Gold Move: Oil pulled back yesterday, but this morning it climbing again, with US crude up 0.55% to $65.99 a barrel and Brent up 0.4% to $71.34. Traders are pricing in Middle East risk ahead of fresh US-Iran talks, even as the American Petroleum Institute reported an 11.43 million-barrel inventory build, meaning stockpiles rose. Gold also firmed, up about 0.7% to roughly $5,184 an ounce as of 6:30 AM ET, and it often rises when trade fights or geopolitics make investors feel jumpy. Higher oil tends to help energy stocks but squeeze airlines and consumers, so next up is the official US inventory report later today and Thursday’s Geneva talks. |
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Heavy Machinery and Industrial Power Gear
This week’s spotlight is heavy machinery and industrial power equipment: the companies that sell excavators, engines, and rental gear. These stocks tend to perk up when construction and factory activity accelerates. The Industrial Select Sector SPDR ETF (XLI), rose about 1.1% over the past week through Tuesday’s close.
Artificial intelligence (AI) is creating a physical shopping list: more data centers, more electrical gear, more backup generators. Add tariffs and supply snags, and “lead time” pops up on earnings calls. Longer lead times can lift order books today, but can backfire if projects get delayed or canceled.
Caterpillar (CAT):
Caterpillar builds construction and mining machines and sells engines and generators. Its dealer network is a moat, because parts and repairs bring repeat revenue. Generator demand has helped lately, but tariffs are a cost risk in 2026.
United Rentals (URI):
United Rentals rents construction and industrial equipment, so it can benefit even when customers hesitate to buy. Its edge is scale and a growing specialty lineup for big projects. Rental revenue just hit a quarterly record, but delivery and depreciation costs can squeeze margins.
Komatsu (6301.T):
Komatsu is a Japan-based rival to Caterpillar in construction and mining. It stands out in mining with autonomous haulage and connected-machine tools that help cut downtime. A stronger yen and higher costs have been headwinds, showing how currency can swing results.
InvestorsGrow Takeaway:
Watch the Purchasing Managers’ Index (PMI). Two key performance indicators: backlog for machinery makers and fleet utilization for renters. Two red flags: inventories piling up and/or utilization slipping. If PMI rises while backlog grows and utilization stays high, expect this group to keep lifting.
Thomson Reuters (TRI)
Thomson Reuters sells subscription software and content that help lawyers, accountants, and companies research and draft documents, and it owns Reuters News. On Tuesday, the company said its AI-powered legal assistant, CoCounsel, has reached 1 million users, and the stock surged more than 11% in the session. Even with that pop, TRI is still down roughly 50% over the past 12 months, which shows how aggressively investors have been discounting “AI disruption” risk in this group.
Earlier this month, Anthropic’s latest AI release helped spark a broad selloff across software and services stocks on fears that automation could squeeze subscription pricing power, even as multiple firms rolled out workflow tools integrating Anthropic’s Claude model. Thomson Reuters got dragged with the group, even though Legal Professionals is its largest segment (about 38% of 2025 revenue). By market value, Thomson Reuters sits near $40 billion, versus roughly $55 billion for peer RELX.
TRI DCF Summary, Feb 25, 2026
The 1 million-user mark matters because it hints the product is sticking, not just being demoed. CoCounsel automates research, document review, and drafting, and it came out of Thomson Reuters’ $650 million Casetext deal in 2023.
Watch pricing per user, updates on how many users become paying seats, and competitive moves from RELX and others. If paid adoption keeps climbing, then the disruption fear fades; if it slows, investors will worry about churn (customers leaving).
InvestorsGrow Takeaway:
This is a fight over who owns the workflow: trusted tools grounded in proprietary content vs. cheap general bots. If CoCounsel’s traction keeps translating into paid seats, then Thomson Reuters has a clearer path to defend pricing and keep its legal engine growing. If AI makes legal research feel interchangeable, the risk is price pressure and higher churn.
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