Barrons Magazine – March 02 2026 – Barrons Magazine (1)

Software Bounces Back The Nasdaq Composite rallied back 1% on Tuesday after an enterprise event hosted by Anthropic emphasized “partnerships over conflict.” Hard-hit software stocks jumped. Good News/Bad News Nvidia crushed earnings expectations late Wednesday, but the stock’s initial gains flipped into a 5.5% slide on Thursday that spread to other large tech stocks. The Nasdaq Composite fell 1.2%. February Chill The Dow fell 1.1% on Friday on renewed AI fears and the specter of war between the U.S.

and Iran, marking the blue-chip index’s largest weekly decline since November. Whythe Is Looking ‘Toppy.’It’s NotJustAI. he stock market has a Nvidia problem. Anyone who read the chip maker’s earnings might assume the market would rise. Nvidia beat earnings forecasts, is see- ing fast growth for its high-margin data-center chips, and even guided for $78 billion in first-quarter sales— $5 billion above expectations. The stock, however, dropped 9.4% for the last two days of this week, help- ing to lead the market lower.

The Dow Jones Industrial Average dropped 1.3% for the week, its worst weekly showing since late November, while the Nasdaq Composite fell 1%, and the S&P 500 index declined 0.4%. “The [artificial-intelligence] trade has gotten stretched,” says Kenny Pol- cari, veteran trader and chief market strategist at SlateStone Wealth. If only the market didn’t have other things to worry about. Private-credit fears have hit financial stocks. Janu- ary’s producer price index revealed hotter-than-expected cost inflation. A U.S.

attack on Iran could be in the works. And the administration is increasing base tariffs on imports moving into the U.S. But ultimately, it comes back to earnings, especially profit margins. While nothing in Nvidia’s earnings call pointed to slowing data-center growth—one of the market’s greatest fears—its 75% full-year gross margin guidance beat estimates by only a few tenths of a percentage point.

And it isn’t just Nvidia whose margins could be peaking—or even coming under pressure. Aggregate reported gross margins for S&P 500 companies—excluding financials and real estate companies—recently dropped to roughly 45% from a multidecade peak of over 47% in 2021, according to Trivariate Research. Gross margins are important because they’re a key indicator of a company’s future earnings. Lower ones indicate that each product or service it offers is inherently less profitable and is often consistent with waning demand and growth, even if net margins, which companies can boost through cost-cutting, suggest that everything is fine.

InternationalTrader StrikingPrice InsideScoop For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact Barron’s reprints department at 800-843-0008 or www.djreprints.com March 2, 2026 There’s a direct link between margins and valuations. Price/earnings ratios are usually higher at companies with fatter gross margins, Trivariate’s data show, so margin disappointments would reduce mul- tiples, and cause individual stocks to fall. The result: The S&P 500 has gone no- where for the past two months. To Frank Cappelleri, market technician and founder of CappThesis, the selling suggests a mar- ket that looks “toppy.”

Our index lists significant companies mentioned in stories and columns, plus Research Reports, and Corrections & Amplifications. The references are to the first page of the item in which the company is mentioned. For Customer Service, call 1 (800) 544-0422, or go to customercenter.barrons.com. For reprints of articles, call 1 (800) 843-0008, or go to djreprints.com. A Advanced Micro Devices .

. . . . . . . . . . . . . . . . . . 19 Alphabet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,14,19 Amazon.com. . . . . . . . . . . . . . . . . . . . . . . . .

. . . .11,19 American Balanced . . . . . . . . . . . . . . . . . . . . . . . . 14 Amphenol. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 A.P. Moeller-Maersk .

. . . . . . . . . . . . . . . . . . . . . . . 6 B Barrick Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Bitdeer Technologies Group. . . . . . . . . . . . . . . .27 Blackstone . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 BP .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Bristow Group . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . 27 Broadcom . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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