By Martin Baccardax

Wall Street is entering an important stretch, with a series of events over the next week that could either spark a breakout from the market's current malaise or extend the selloff in tech stocks that has clouded investors' sentiment since autumn.

The S&P 500, in fact, is little changed from its late October levels, having tried and failed to test the 7000 point market in the early days of each of the past three months. The benchmark remains flat on the year, as well, having ended just 0.03% south of its Dec. 31 close on Tuesday.

Its biggest stocks, however, have followed a different path. An index of the so-called Magnificent Seven tech stocks, which comprise around 40% of the benchmark's total value, is trading within a whisker of correction territory, having fallen 9.6% from its Oct. 29 peak.

Sentiment since then has shifted from "are the biggest tech stocks in a bubble" based on their lack of returns from the billions spent on artificial intelligence to " will AI devour companies outside of pure tech" as it becomes more powerful and ubiquitous.

"The market is treading water right now waiting for its next catalyst," said Paul Stanley, CIO at Granite Bay Wealth Management in Portsmouth, NH.

"But the fact that the S&P 500 is flat, and the Nasdaq is down, suggests that the market's broadening is alive and well, which is extremely important for the overall health of the bull market," he added.

Related concerns tied to dollar debasement, meanwhile, have amplified gains in precious metals and commodities, while triggering a meltdown in Bitcoin prices. Treasury bond markets have rallied in hopes of a dovish Federal Reserve, but worries remain over the fate of President Donald Trump's tariff regime and the slow erosion of the nation's fiscal soundness.

That mix of events has stocks trading, for the most part, sideways in a market that, curiously, feels as if it's in a downtrend.

Wall Street analysts haven't thrown in the towel just yet, however, and remain largely in agreement that the S&P 500 will ride a tailwind of solid corporate earnings, lower interest rates and a fiscal boost from the One Big Beautiful Bill Act and end the year near the 7750 point mark.

That seems a long way from way where we are now, however, and it won't be reached if the market continues with its monthslong rotation from megacap tech and growth names, which boost index levels, to real economy and value stocks, which don't do much at all.

The next seven days, however, could change that.

Minutes from last month's Fed policy meeting, published later on Wednesday, likely won't move the needle on their own, but they will provide a compass from which investors can plot the central bank's vision once (or if) Kevin Warsh assumes the chairmanship in June.

Friday's PCE inflation report will also likely add another piece of information to emerging improvement in price pressures which, alongside a resilient labor market, could give the Fed enough wiggle room to justify further rate cuts.

And Nvidia's earnings report next week, expected after the close of trading on Feb. 25, will not only provide more detail on the strength of AI demand but also likely inject a dose of much-needed optimism into a market that's suffering from a lot of new technology angst.

A looming Supreme Court decision on the legality of Trump's use of emergency powers to justify a host of trade tariffs, meanwhile, could upset the entire ecosystem and trigger a selloff similar to the one seen during last year's "Liberation Day" chaos.

Volatility gauges are rising, but not to the degree you might expect given the host of events ahead. The current VIX reading sits just below the 20 point mark, a level that suggests manageable daily swing of around 85 points for the S&P 500.

Complacent, bullish or indecisive? The next seven days may answer all three questions and provide a blueprint for the market heading into the first half of the year.

Write to Martin Baccardax at martin.baccardax@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 18, 2026 07:55 ET (12:55 GMT)

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