Wall Street Remains Cautious Ahead of Fed Minutes

Investors balance optimism and skepticism as tech giants ramp up AI spending

Published on Feb. 21, 2026

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Wall Street is in a state of cautious optimism as it awaits the release of the Federal Reserve's latest meeting minutes. While some tech stocks like Nvidia and Amazon have seen gains, others like Palo Alto Networks have faced headwinds. Investors are grappling with concerns that the tech giants' heavy investments in artificial intelligence may not pay off as expected, leading to a compression in valuations. The broader market, however, has remained relatively stable, with defensive sectors like utilities and consumer staples gaining ground.

Why it matters

The tech sector's AI spending binge and the market's reaction to it are indicative of broader concerns about the future of the economy and the potential impact of disruptive technologies. Investors are trying to balance their belief in the transformative power of AI with doubts about the ability of tech firms to generate the profits needed to justify their investments. This tension is shaping market sentiment and could have far-reaching implications for the broader economy.

The details

Nvidia announced a multiyear deal to supply millions of advanced AI chips to Meta, while Amazon, Microsoft, and Analog Devices also saw gains. However, Palo Alto Networks slid after trimming its profit forecast, citing higher costs tied to expanding its AI capabilities. Investors are increasingly wary of the tech giants' capital spending on AI, with roughly one-third of investors believing companies are overinvesting, according to a Bank of America survey.

  • The Federal Reserve's meeting minutes are set to be released today.
  • Traders are pricing in about a 63% chance of a rate cut by June, the first time odds have climbed above 50%.

The players

Nvidia

An American technology company that designs graphics processing units (GPUs) for the gaming and professional markets, as well as system on a chip units (SoCs) for the mobile computing and automotive market.

Meta

A multinational technology conglomerate that owns social media platforms such as Facebook, Instagram, and WhatsApp.

Palo Alto Networks

An American multinational cybersecurity company that provides firewall and other cybersecurity solutions to businesses and governments.

Michael Barr

A Federal Reserve governor who has stated that he wants clear evidence that goods inflation is truly retreating before backing further rate cuts.

Christine Lagarde

The current President of the European Central Bank, who may step down before her term ends in 2027.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

“Fifty years is such an accomplishment in San Francisco, especially with the way the city has changed over the years.”

— Gordon Edgar, grocery employee (Instagram)

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.