Shares of Advanced Micro Devices rose about 1.3% in early Wednesday trading after the company announced a new supply agreement aimed at supporting its next-generation artificial intelligence chips.

The move came despite weakness across broader US markets, highlighting investor focus on AI-driven growth opportunities within the semiconductor sector.

Broader markets weighed by inflation data

The Dow Jones Industrial Average fell 351 points, or 0.8%, while the S&P 500 declined 0.5%.

The Nasdaq Composite also slipped 0.5%.

The decline followed a stronger-than-expected producer price index (PPI) report, which showed wholesale prices rising 0.7% in February, well above the 0.3% increase forecast by economists.

The data reinforced concerns that inflation remains persistent, even before factoring in rising energy costs tied to the Iran conflict.

Samsung partnership targets HBM4 supply

AMD said it has signed a memorandum of understanding with Samsung Electronics to expand its strategic partnership on memory chip supplies for AI infrastructure.

The agreement focuses on securing next-generation high-bandwidth memory, or HBM4, for AMD’s upcoming Instinct MI455X AI accelerators.

It also includes optimised DDR5 memory for AMD’s sixth-generation EPYC processors.

Samsung will position itself as a key HBM4 supplier for AMD’s next-generation AI GPUs, building on an existing relationship in which it already provides HBM3E memory for AMD’s current accelerators.

The companies also said they would explore a potential foundry partnership, under which Samsung could manufacture next-generation AMD chips.

AI chip race intensifies

The partnership comes as chipmakers race to lock in long-term supply of advanced memory components, which have become critical for AI workloads.

High-bandwidth memory is in particularly tight supply, with demand surging as companies build out large-scale data centres and AI infrastructure.

Samsung currently holds about 22% of the global HBM market, according to Counterpoint, trailing SK Hynix, which leads with a 57% share.

The agreement also comes during the same week as Nvidia GTC, where Nvidia announced its own foundry partnership with Samsung and highlighted the importance of HBM4 technology.

AMD has been aggressively expanding its position in the AI market, including a recent agreement to supply up to $60 billion worth of AI chips to Meta Platforms over five years, alongside a similar deal with OpenAI.

Analysts remain cautious

Despite the positive developments, Wall Street analysts remain measured in their outlook on AMD.

Last month, Goldman Sachs analyst James Schneider raised his price target on AMD to $240 from $210 but maintained a Neutral rating, citing concerns about limited near-term operating leverage as the company continues to invest heavily in research and development.

Similarly, DA Davidson analyst Gil Luria initiated coverage with a Neutral rating and a $220 price target.

Luria argued that AMD may be lagging in building a comprehensive ecosystem, particularly in software and networking capabilities, compared with Nvidia.

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Shares of Eli Lilly came under pressure on Tuesday after HSBC downgraded the stock, raising fresh questions about whether the pharmaceutical giant’s strong run in the obesity drug market can continue or if investors should reassess valuations.

The stock slipped 4.2% following the downgrade, even as it remains one of the best-performing large-cap healthcare names over the past year.

Lilly shares are still up about 14% over the last 12 months, sharply outperforming rival Novo Nordisk, whose stock has declined more than 54% over the same period.

Valuation concerns drive downgrade

HSBC analyst Rajesh Kumar downgraded Eli Lilly to “Reduce” from “Hold” and cut the price target to $850 from $1,070, citing concerns that the stock may have run ahead of fundamentals.

Despite the downgrade, the analyst did not turn outright negative on the company’s business execution. Instead, the key issue appears to be valuation.

Shares are currently “priced to perfection,” Kumar wrote, suggesting that much of the optimism around Lilly’s growth prospects is already reflected in its stock price.

The downgrade reflects a growing debate among investors over whether the obesity drug boom can sustain current expectations, particularly as competition intensifies and pricing dynamics evolve.

Obesity drug market expectations under scrutiny

A major driver of HSBC’s cautious stance is its revised outlook for the total addressable market (TAM) for obesity drugs.

Kumar believes consensus expectations of a market exceeding $150 billion are overly optimistic.

Instead, he projects the TAM will fall between $80 billion and $120 billion by 2032.

This reassessment comes as pricing pressures increase across the sector, particularly with competition from Novo Nordisk, the maker of Wegovy.

“Rising working capital intensity at Lilly, headline price pressures, and rebate dynamics at both companies indicates to us that the pricing dynamics are likely to get worse,” the analyst wrote.

The divergence in outlook between Lilly and Novo Nordisk has also raised concerns among investors.

“The divergence of Lilly’s guidance with that of Novo has been puzzling, not just to us, but most investors,” Kumar added.

He attributed part of this gap to Lilly’s success in the cash-pay channel, which he said is driven more by pricing than product differentiation.

Pipeline risks and competitive pressures

While Lilly continues to expand its obesity drug portfolio, HSBC also flagged potential risks tied to its upcoming products.

The launch of the once-daily orforglipron pill later this year is expected to broaden access to weight-loss treatments. However, Kumar cautioned that expectations may be too high.

“We think that the compliance and persistence of these drugs might disappoint,” Kumar wrote.

Current market estimates of $1.1 billion to $1.3 billion in 2026 revenue from the drug are viewed as optimistic, especially given that they are partly anchored to Lilly’s $1.5 billion stockpile in pre-launch inventory.

At the same time, Novo Nordisk is expected to compete aggressively, with pricing pressures likely to intensify as both companies seek to capture market share.

Despite these concerns, HSBC emphasized that healthcare remains an attractive sector overall, describing it as a relatively defensive space amid broader macroeconomic uncertainty.

For Lilly, however, the key question for investors is whether the recent pullback represents a buying opportunity or a signal that expectations around the obesity drug market may need to be recalibrated.

According to TipRanks data, 16 of 19 analysts gave a buy rating, 2 a hold rating, and 1 a sell rating, with HSBC’s being the sole sell rating.

The consensus analyst rating for Eli Lilly remains positive despite HSBC’s cautious warnings.

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Shares of Chinese electric vehicle maker Nio Inc. climbed to a four-month high as Wall Street upgrades and strong financial results strengthened the company’s growth outlook.

US-listed shares of Nio rose nearly 4% on Monday extending its 5 day gains to 15%.

The stock gained following the release of its first quarterly profit report in the previous week.

The recent rally comes as analysts grow more optimistic about the company’s delivery growth, profitability trajectory, and product pipeline heading into 2026.

Wall Street upgrades boost Nio outlook

Several brokerages upgraded the stock or raised price targets following Nio’s latest earnings report.

HSBC upgraded Nio to “Buy” from “Hold” and raised its price target to $6.8 from $4.8.

The bank cited improving earnings visibility and said it has “stronger conviction” in the company’s growth trajectory.

HSBC added that new models and expansion of the company’s core portfolio, particularly the ES8, could support delivery growth, improve product mix and drive margin expansion.

The firm also pointed to strong order momentum across Nio’s lineup as a factor that could support future volumes.

Nomura also upgraded Nio to “Buy” from “Neutral” with a $6.6 price target.

The brokerage said the company’s business and financial performance have improved over the past two quarters and that Nio appears to be entering a healthier operating cycle.

While Nomura lowered shipment forecasts for 2026 and 2027, it still expects about 25% compound annual growth in shipments between 2025 and 2028.

Meanwhile, Bank of America Securities raised its price target to $6.7 from $6.3 while maintaining a “Neutral” rating.

The firm noted Nio’s strong model pipeline and operating expense discipline but cautioned that sector headwinds remain.

These headwinds include lower EV purchase subsidies and cost inflation expected in 2026.

First quarterly profit marks key milestone

Nio’s share rally was also fueled by its latest financial results, which marked the company’s first profitable quarter.

The company reported revenue of 34.65 billion yuan ($4.95 billion), exceeding analyst estimates of 33.25 billion yuan.

Adjusted earnings came in at 0.29 yuan per share, well above the 0.05 yuan consensus estimate.

Vehicle deliveries reached 124,807 units in the fourth quarter, representing a 72% increase year over year.

For the full year, deliveries rose 47% to 326,028 vehicles, while total revenue increased 33.1% to 87.49 billion yuan.

The company’s guidance also contributed to the positive sentiment.

Nio expects first-quarter deliveries of 80,000 to 83,000 vehicles, representing 90% to 97% year-over-year growth.

Revenue for the quarter is projected to range between 24.48 billion yuan and 25.18 billion yuan, above the 23.3 billion yuan consensus estimate.

Expansion and model pipeline support growth narrative

Nio’s recent momentum has also been supported by its expanding product lineup and international growth strategy.

The company has seen success with newer models and plans to launch additional vehicles this year, which could help boost sales volumes.

Management continues to project 40% to 50% delivery growth in 2026, despite challenges across China’s broader automotive industry.

The EV maker is also pursuing international expansion as it seeks to increase sales outside China.

Industry developments could further support demand for battery-electric vehicles.

While sales of plug-in hybrids have slowed in China, battery-electric vehicle penetration continues to rise, which could benefit companies such as Nio that exclusively produce BEVs.

At the same time, Nio is investing in semiconductor development through its chip subsidiary Shenji, which is developing its second chip and exploring potential third-party customers.

The effort aligns with China’s broader push to strengthen domestic semiconductor capabilities while reducing reliance on imported chips.

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The S&P 500 Index remained under pressure last week, falling to its lowest level since November 2025. It dropped to $6,632 on Friday, down sharply from the year-to-date high of $7,700. This article explores some of the top catalysts for the S&P 500 Index and its ETFs like VOO and SPY.

S&P 500 Index to react to Federal Reserve interest rate decision 

A major catalyst for the S&P 500 Index and its ETFs this week will come out on Wednesday when the Federal Reserve delivers its interest rate decision on Wednesday.

Economists expect the central bank to leave interest rates unchanged between 3.50% and 3.75%. Officials will also send a signal on what to expect this year now that the US has moved into a stagflation.

Data released this month showed that the labor market weakened in February, with the economy losing over 92,000 jobs. The unemployment rate rose from 4.3% in January to 4.4% in February.

Another report showed that the headline Consumer Price Index (CPI) rose in February. It rose 2.4% in February, while the core inflation rose 2.5%.

Therefore, analysts expect that the bank will maintain interest rates unchanged in the foreseeable future.

Top corporate earnings 

The S&P 500 Index has retreated after the recent earnings season, which was highly positive. Data compiled by FactSet showed that the average earnings growth rose by over 13% in the fourth quarter of last year, with most companies, including popular names like Nvidia and Apple.

More smaller companies will publish their financial results this week but the impact on the S&P 500 Index will be limited. Dollar Tree and Aramark will publish their financial results before the markets open on Monday. 

Elbit Systems, Lululemon, DocuSign, and Okta will release their numbers on Tuesday, while Micron, Jabil, Williams-Sonoma, and General Mills will release on Wednesday. The other top companies to publish their numbers are Accenture, FedEx, Darden, and Planet Labs will release their numbers later this week.

Iran war continues, pushing crude oil prices higher 

The S&P 500 Index will react to the ongoing Iran war that has continued in the past few weeks. This war has pushed crude oil prices to the highest level in years, with Brent and the West Texas Intermediate moving to $100. 

Natural gas, heating oil, and other energy prices have jumped. Similarly, fertilizer prices have soared, leading to a surge in fertilizer stocks like Nutrien and Mosaic.

Signs that the war is accelerating will lead to more S&P 500 Index downside. On the other hand, signs that the war is ending will be bullish for the stock market.

S&P 500 Index technical analysis 

The daily timeframe chart shows that the S&P 500 Index has come under pressure in the past few weeks as the stock market has moved from one crisis to the other, including the woes in the private credit sector.

It has moved from a high of $7,000 in February to $6,630. As a result, the index has moved below the 50-day and 25-day Exponential Moving Averages (EMA).

The stock has formed a rounded top, a common bearish continuation sign in technical analysis. It remains slightly above the 23.6% Fibonacci Retracement level at $6,495. 

Top oscillators have continued falling, with the Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have continued falling in the past few months.

Therefore, the index will likely continue falling, with the next key target being the 38.2% Fibonacci Retracement level at $6,178. 

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As the conflict in the Middle East continues to roil global markets, investors are searching for signs of a turnaround.

However, today on CNBC, Altaf Kassam – EMEA Head of Investment Strategy and Research at State Street Global Advisors – provided a sobering reality check.

While historical precedents suggest that markets often rally before a conflict officially concludes, Kassam warned that the current geopolitical and economic landscape – defined by a direct military confrontation with Iran – may not follow the traditional “snap-back” script.

Instead, a persistent “risk premium” is expected to hang over US stocks long after the guns fall silent.

The ‘fear tax’ on US stocks to stick around

Kassam said financial markets are inherently forward-looking – often pricing in the conclusion of a war well before the final ceasefire.

“In previous conflicts, what we’ve seen is that markets discount the end of the war well before any military conflict has ended,” he noted, adding this phenomenon could repeat if investors see a clear diplomatic path forward.

Kassam specifically highlighted the role of the White House, saying, “it seems clear that President Trump is preparing some off-ramp, and when he says the war is over, the markets might start to have some relief rally.”

However, he cautioned that while a celebratory headline rally is possible, it should not be confused with a return to the low-volatility environment seen in previous years.

Kassam doesn’t see a V-shaped recovery ahead

One of the most striking aspects of Kassam’s analysis is the belief that the “risk premium” currently embedded in US stock prices will not simply evaporate once hostilities cease.

Unlike the “V-shaped” recoveries typical of the last decade, State Street anticipates a much stickier environment for risk in 2026.

“What we believe is that the risk premium that has started to be baked in will stay there,” Kassam explained, adding that “markets won’t snap back as quickly as they fell, and we won’t see a clean mean reversion.”

What this means is: the structural damage to global energy supply chains and the heightened threat of asymmetric retaliation have fundamentally shifted the floor for valuations, leaving investors to grapple with higher costs of capital and lower price-to-earnings multiples for the foreseeable future

The looming shadow of stagflation

The most notable threat to the long-term health of the stock market, according to Kassam, is the potential for a “regime change” in the global economy toward stagflation.

As oil prices hover near $100 per barrel and the Strait of Hormuz remains a flashpoint, the twin pressures of stagnant growth and rising prices create a toxic cocktail for “risky assets.”

Kassam warned that “the worst-case scenario… is stagflation, low growth and increasing inflation.” If the global economy enters this regime, the era of easy gains through passive index investing may be over.

“It’ll be a much tougher market to trade,” he concluded, signalling that active management and a focus on defensive sectors like energy-intensive alternatives or aerospace may be the only way to navigate this complex new reality.

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