THE DEAN’S LIST: The Week That Just Doesn’t Matter Anymore

Dean’s note:
This was one of those weeks that will be completely forgotten. A State of the Union address that was pure theater. Nvidia earnings that beat big but barely moved the stock. A hot inflation print on Friday. And then boom, Saturday happened.

Operation Epic Fury. The U.S. and Israel launched coordinated strikes on Iran. Khamenei was killed. Iran retaliated with missiles across the Gulf. The Strait of Hormuz is effectively closed to tanker traffic. Oil surged. Gold surged. And the world woke up to a very different reality on Monday morning.

The S&P 500 is coming into March essentially flat for the year. Monday was a test of the market’s resolve, and honestly? It passed. Stocks opened down over 1%, then clawed all the way back to close flat. Defense and energy stocks led. Investors rotated into cash-rich tech names like Nvidia and Microsoft. The buy-the-dip instinct is still alive.

Now everyone wants to know: will this war cause a bear market? Or does it accelerate the rotation out of large caps into commodities, defense, and value? Or is it neither of those things? We won’t make decisions as bombs drop, but we will watch carefully. I will say this is the scariest week for the world since COVID. But the market’s early response leaves plenty of room for optimism. The calm start to the trading week was eerie, yet wonderful.

A packed week with big headlines. Here’s what actually mattered:

Monday–Tuesday (Feb 24–25): Oil pulled back slightly as nuclear talks in Geneva showed a flicker of hope. The S&P managed a small gain. Precious metals kept climbing. Investors positioned ahead of a busy stretch: Nvidia earnings on Wednesday, State of the Union on Tuesday night, and inflation data on Friday.

Wednesday (Feb 26): The big day for Nvidia. After hours, the company crushed expectations—$68.1 billion in revenue versus $66.2 billion expected, earnings of $1.62 per share versus $1.53 estimated. Data center revenue climbed 75% year-over-year to $62.3 billion. And the stock? Barely moved. That tells you something about expectations in AI land. TJX also reported a blowout quarter with 9% revenue growth and 16% EPS growth. The retail consumer is alive and spending.

Thursday (Feb 27): Nvidia gave back its small post-earnings pop. The market digested the State of the Union speech and found nothing actionable for portfolios. Iran-US talks in Geneva continued with no deal. Oil pushed higher. Bond yields drifted lower as investors started buying safety. The Nasdaq stumbled.

Friday (Feb 28): The gut punch. The Producer Price Index came in hot. Headline PPI rose 0.5% versus the expected 0.3%. Core PPI surged 0.8% versus 0.3% expected. Stocks sold off. The Dow dropped over 500 points. The S&P closed down 0.43%. But here’s the twist: bond yields actually fell. The 10-year dropped below 4% to 3.96% and gold surged past $5,200. Now we all know why. Smart money was front-running what came next.

Saturday (March 1): Operation Epic Fury. The U.S. and Israel launched coordinated military strikes across Iran, targeting leadership, military facilities, and nuclear infrastructure. Iran’s Supreme Leader Khamenei was killed. Iran declared 40 days of mourning and launched retaliatory missile and drone strikes against Israel, the UAE, Qatar, Kuwait, Bahrain, and Saudi Arabia. The Strait of Hormuz was effectively closed to tanker traffic. The Burj Al Arab in Dubai was among targets struck. The world changed overnight.

Monday (March 3): Markets opened sharply lower. The S&P dropped 1.2% at its lows, the Dow fell nearly 600 points. Then something remarkable happened. Investors bought the dip. Hard. By the close, the S&P was essentially flat. The Nasdaq actually gained 0.36%, led by cash-rich tech names. Defense stocks surged, Northrop Grumman up 6%, Lockheed Martin up 6%, Palantir up nearly 6%. Energy stocks rallied. Brent crude surged 9% to around $78. Gold topped $5,300 and tested $5,400. Bond yields, which had fallen to 3.96% over the weekend on flight-to-safety buying, popped right back above 4% as the market priced in the inflationary impact of higher oil. That reversal in yields is important. It tells you the panic phase may already be fading.

Let’s start with what happened. On Saturday, February 28, the United States and Israel launched a massive coordinated military campaign against Iran. Over 2,000 strikes in the first 72 hours. Iran’s Supreme Leader Khamenei was killed. Top military commanders and security officials were eliminated. The stated goal from the administration is to destroy Iran’s military threats and nuclear capabilities. Defense Secretary Hegseth said this isn’t technically a “regime-change war,” but acknowledged that the regime has changed.

Iran hit back. Missiles and drones targeted Israel, the UAE, Qatar, Kuwait, Bahrain, Jordan, and Saudi Arabia. Dubai’s iconic Burj Al Arab was struck. Drones hit the U.S. Embassy in Riyadh. Six American service members have been killed so far. The Strait of Hormuz, through which roughly 20% of the world’s oil flows every day, has been effectively closed to tanker traffic. That last part is the one that matters most for your wallet.

Oil is the transmission mechanism between this conflict and your life. Brent crude surged to around $78 on Monday, up roughly 9%. Some intraday prints touched $82. If the Strait stays closed for weeks, analysts at Goldman Sachs have warned oil could top $100. That means higher gas prices. Higher shipping costs. Higher prices for everything that moves on a truck, plane, or ship. And that means more inflation pressure at exactly the moment we thought the Fed might start cutting rates.

But here’s what the doomsday crowd is missing. Monday’s stock market reaction was remarkably measured. The S&P opened down 1.2% and closed flat. Investors didn’t panic. They rotated. Defense stocks surged. Energy stocks gained. Cash-rich tech leaders like Nvidia and Microsoft rallied. The market was behaving exactly like a rational organism processing new information, not a panicked herd running for the exits.

Dean’s note:
I’ve been doing this long enough to have seen the Gulf War, 9/11, the Iraq invasion, Afghanistan, the strikes on Iran last June. Every single time, the instinct is to sell everything and hide. And every single time, the people who did that wished they hadn’t. Markets process geopolitical shocks faster than you’d think. The initial panic is the worst of it. That doesn’t mean it’s over.

Oil at $78 is manageable. Oil at $100 is a different story. The Strait of Hormuz is the variable to watch. If it reopens within days, this becomes a footnote. If it stays closed for weeks, we’re looking at a real inflation shock. I think the likelihood is that both sides come to their senses before boots end up on the ground. But I’ll say it plain: this is the scariest week for the world since COVID. We have a 10% cash buffer for a reason. Let’s see if this is the month we put it to work. Don’t sell into panic. If you’re diversified, you’re built for moments like this. Watch, breathe, and remember your time horizon.

It feels like a lifetime ago, but Nvidia reported fiscal fourth-quarter results on Wednesday that beat on every metric that matters. Revenue hit $68.1 billion, up 73% from a year ago. Earnings per share came in at $1.62, well above the $1.53 estimate. Data center revenue - which now makes up over 91% of the company - climbed 75% to $62.3 billion. The company also shipped its first next-generation Vera Rubin samples to customers.

The stock reaction before the weekend? Almost nothing. Up a bit after hours, then gave it back by Thursday. That’s not a bad sign, actually. It means expectations are so high that even a blowout quarter gets a shrug. The death of AI stocks has been greatly exaggerated. But the expectations are now astronomical. So big that Nvidia blowing past estimates doesn’t move the stock like it used to.

Interestingly, on Monday, in the middle of a war in the Middle East, Nvidia rallied 3%. Investors rotated into cash-rich tech leaders as a relative safe haven. When the world gets scary, you want to own companies with fortress balance sheets and indispensable products. That’s Nvidia right now.

Dean’s note:
The AI spending story is real and it’s not over. Hyperscalers could spend nearly $700 billion combined on AI infrastructure this year. That’s the demand story. But the era of every AI stock going up just because it has “AI” in the pitch deck? That part is done.

From here, the market will reward companies that show real returns on their AI investment, not just promises. Nvidia is still the toll booth on the AI highway. If you own it, great. If you don’t, wait for your pitch.

While everyone was watching Nvidia and panicking about inflation last week, something quietly remarkable happened in retail. TJX, parent of T.J. Maxx, Marshalls, and HomeGoods, reported a blowout quarter. Revenue up 9%, earnings per share up 16%, comparable store sales up 5%. Ross Stores hit a new all-time high. Walmart and Costco continue to trade near records.

Here’s why this matters. If we were heading into an economic doom scenario, these companies wouldn’t be making new all-time highs. People are still spending. They’re just spending smarter. The “trading down” phenomenon is real: even higher-income households are showing up at off-price retailers to stretch their dollars. TJX reported that its customer base is actually getting wealthier, not poorer. That’s not a recession signal. That’s a shift in behavior.

These stocks are also benefiting from the tariff environment. Off-price retailers have a unique advantage: their opportunistic buying model lets them pivot quickly. When traditional retailers pass tariff costs onto consumers, the price gap between a department store and a T.J. Maxx gets even wider. That’s a structural tailwind, not a one-time boost.

Dean’s note:
It’s tough to believe economic doom is coming when TJX, Ross, Walmart, and Costco are all making new all-time highs. These are companies with their fingers on the pulse of the everyday consumer. When they’re thriving, it tells you the foundation of the economy is still solid, even if it’s not perfect.

The consumer is adapting, not collapsing. Pay attention to what people actually do with their money, not what the headlines say they should be feeling. Now, will war change that picture? Maybe at the margins. Gas prices going up hits household budgets. But the consumer entered this conflict in a position of strength. That matters.

I hope you watched the State of the Union last week. If you didn’t, here’s the short version: it was the longest one in modern history at nearly two hours. It was political theater at its finest, which should surprise nobody. This is Trump’s favorite medium.

We heard fuzzy tariff math, a push for homeownership, and fraud crackdown highlights. At one point, the President essentially challenged Democrats to stand if they supported certain groups over citizens. It put the opposition in a no-win visual. If they stood, they fed the narrative. If they stayed seated, they looked unsympathetic. Good politics. But from a markets standpoint, that moment matters because it signals how polarized the path forward will be.

The speech wasn’t structured to build legislative bridges. With narrow margins in the House and no overwhelming majority in the Senate, sweeping policy requires cross-party votes. The more combative framing means large structural reforms become less likely. Investors should be watching that dynamic as closely as the tariff numbers.

On tariffs specifically, the idea they can meaningfully replace income tax revenue is fantasy once you look at the scale. We collect roughly $2.5 to $3 trillion per year from individual income taxes. Total annual imports are around $3 trillion. Even if you imposed a 10% tariff across the board with zero behavioral change, you’re talking about roughly $300 billion in gross revenue. That assumes imports don’t fall, supply chains do nothing, exemptions aren’t granted, and domestic prices don’t compress margins. The math does not scale.

On fraud, I agree with the emotional reaction. It’s appalling when you see headline after headline of public funds misused. But the deeper issue is structural. Fraud isn’t isolated to one program or one geography. It shows up in pandemic relief, healthcare billing, procurement, defense contracts. Big problems need structural fixes. If you focus on optics, you get headlines. If you focus on incentives and systems, you get actual change. Investors should always ask which path policymakers are pursuing.

Dean’s note:
My broader takeaway is this. The speech was good politics. It sharpened contrast, energized the base, and forced uncomfortable optics for the opposition. But for investors, the key variable is implementation probability.

Given the polarization and tight margins, the most extreme versions of these proposals will likely be moderated. Markets tend to prefer that. Big rhetoric moves headlines. Gridlock moves portfolios higher. Keep your eye on what actually gets passed, not what gets promised from the podium.

This was a week where the market showed you two things at once. On the surface: inflation fears, geopolitical eruption, a rough end to February. Under the surface: retailers thriving, the market broadening, bonds signaling caution rather than crisis, and Nvidia proving that AI demand is real even if the stock doesn’t jump 10% on every beat anymore. Then Saturday happened and reshuffled everything.

Large caps are basically flat for the year after a slightly negative February. The market doesn’t go up in a straight line. What matters is what’s happening underneath and abroad.

Here’s my framework for the week ahead:

•  Watch the news, but don’t overreact. The market will start pricing the end of the Iran conflict just when you think the temperature is still rising. Bond yields popped right back up after the weekend and the dollar strengthened. Monday’s buy-the-dip recovery was textbook. Could it drag on? Maybe. But history says geopolitical shocks are processed faster than you’d expect. I reserve the right to change my mind.

•  The Strait of Hormuz is the variable that matters most for your wallet. If it reopens in days, oil falls back and this becomes a blip. If it stays closed for weeks, we’re looking at $90–$100 oil and a real inflation problem. Watch the shipping lanes, not the headlines.

•   Don’t overreact to Friday’s PPI number. It was hot, yes. But it was concentrated in services, not goods. One print doesn’t change the trend. The Fed will stay patient, and so should you.

•   Expect rate cuts to be delayed further, especially with oil prices elevated. The market is now pricing in maybe one or two cuts for all of 2026, down from four at the start of the year. That’s a meaningful shift. Higher-for-longer rates mean headwinds for small caps and international stocks.

•  Pay attention to what retailers are telling you. TJX, Ross, Walmart, Costco - these companies are the real-time report card on the consumer. They’re saying the consumer is adapting, not dying. That’s bullish for the long-term.

•  The broadening is healthy. The equal-weight S&P outperforming the cap-weighted index is exactly what a sustainable bull market looks like. The “other 490” stocks are doing the heavy lifting now. Defense and energy are the new leadership. That’s good.

•   Keep contributing to your 401(k). The $24,500 limit is in effect. If you’re 60–63, you can put in $35,750 with the super catch-up. Use it. Buying into a choppy, scary market is exactly how you build long-term wealth. This is the part that matters most.

February was messy. March is starting with a bang, literally. We have a war in the Middle East, more inflation data ahead, and the Fed meeting on the horizon. But messy markets are where long-term investors make their money. You just have to have the discipline to sit through the discomfort. That’s the hardest part. And that’s the part that matters most.

We have a 10% cash buffer for a reason. Let’s see if this is the month we put it to work.

Stay zoomed out.

— Dean

P.S. The common thread between housing, fraud, tariffs, inflation, and now war is scale. Big problems need structural fixes. Speeches are great at diagnosing problems. They’re terrible at solving them. Bombs are even worse. What gets passed matters infinitely more than what gets promised. What gets rebuilt matters more than what gets destroyed. Keep your eyes on the legislation, not the applause lines. Keep your eyes on the oil lanes, not the explosions. Your portfolio will thank you.

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