10 things to watch in the stock market Monday including steel tariffs and an Nvidia call

Key Takeaways:

• President Trump announces 25% tariffs on steel and aluminum imports, boosting steel stocks.
• Nvidia receives an analyst upgrade ahead of its earnings report.
• McDonald’s misses sales estimates but reports better-than-expected same-store sales growth.
• Home Depot’s price target raised amid positive sales forecasts.
• Stocks rebound after previous losses due to tariff concerns.

Market Poised for Rebound After Tariff Concerns

Stocks are indicated higher on Monday following a 1% drop in the S&P 500 last Friday, which was driven by concerns over tariffs and a weaker consumer sentiment survey. The S&P 500, Nasdaq, and Dow are all coming off modest weekly losses. With the earnings calendar easing, investors are turning their attention to significant policy announcements and analyst moves expected to influence market dynamics.

Steel Stocks Surge on Tariff Announcement

President Donald Trump has announced plans to impose a 25% tariff on all imports of steel and aluminum. “President Donald Trump told reporters Sunday that he plans to impose 25% tariffs on all imports of steel and aluminum.” This policy move has led to a premarket surge in shares of steel companies like Nucor, a North Carolina-based producer. Nucor has been on watchlists, and the tariffs are expected to bolster domestic steel producers.

Analyst Upgrades Signal Confidence in Key Companies

Several notable analyst actions are shaping investor expectations this week.

Nvidia Added to Tactical Outperform List

Evercore ISI has added Nvidia to its “Tactical Outperform” list ahead of the AI chipmaker’s February 26 earnings report. Analysts view the stock’s recent sell-off on DeepSeek concerns as an opportunity, maintaining a price target of $190 per share.

Home Depot’s Prospects Brighten

JPMorgan has raised Home Depot’s price target from $450 to $475 per share and added the company to its “Analyst Focus List.” The firm projects U.S. comparable store sales to increase by 1% in the quarter, surpassing analysts’ consensus of a 2.4% decline.

Mixed Results in Earnings Reports

McDonald’s Performance Update

McDonald’s missed Wall Street’s estimates on quarterly sales, though earnings per share were in line with expectations. Same-store sales, however, rose by a better-than-expected 0.4% despite a dip in the U.S. market. The company’s shares increased by more than 1% in premarket trading.

Merck Faces Downgrade Amid Product Concerns

TD Cowen downgraded Merck to a hold rating from buy and lowered its price target to $100 from $121 per share. Analysts cited a lack of improvement in clarity surrounding the HPV vaccine Gardasil and concerns that the cancer treatment Keytruda is nearing its loss of exclusivity.

Industry Movements and Expectations

Johnson Controls Sees Upgrade

UBS upgraded Johnson Controls to a buy rating, expressing optimism about incoming CEO Joakim Weidemanis, who is set to take over next month. Analysts believe that after portfolio reshuffling, Johnson Controls is well-positioned in favorable end markets such as HVAC, fire, and security to expand margins.

Positive Outlook for Palo Alto Networks

Barclays argued that Palo Alto Networks has a good setup heading into its earnings report on Thursday night. Analysts expect upside in key metrics like bookings, annual recurring revenue, and overall revenue. The stock has rebounded, rising nearly 7% year to date after facing downgrades in January.

Challenges in the Packaged Food Sector

Kraft Heinz Downgraded

Mizuho Securities downgraded Kraft Heinz to a neutral rating from outperform. The packaged food industry is facing difficulties, with Kraft Heinz shares down 18.5% over the past year, highlighting the challenges within the sector.

Anticipated Growth in E-commerce

Shopify Upgraded Ahead of Earnings

Benchmark has upgraded Shopify to a buy rating from hold ahead of the company’s earnings report scheduled for Tuesday morning. Analysts expect the e-commerce platform provider to deliver strong results in gross merchandise value, indicating robust performance in the e-commerce space.

Conclusion

As earnings season winds down, investors are closely watching policy developments and analyst recommendations that could influence stock performance. With significant movements expected across various sectors—from steel manufacturing to technology and retail—this week promises to be dynamic for the stock market.