How does US Q4 GDP at 1.4% affect stocks today?

A weaker US Q4 GDP print supports a soft‑landing narrative but raises earnings risk. Valuation depends on rate expectations, so slower growth with sticky inflation can cap multiples. Today, the S&P 500 trades in a range as investors weigh support from potential 2026 cuts against near‑term macro softness and neutral momentum.

Why does 3% core PCE inflation matter for Federal Reserve rate cuts?

Core PCE at 3% sits above the Fed’s 2% goal, so policymakers can wait for clearer disinflation before cutting. If monthly prints cool, cuts come sooner and help valuations. If inflation stays near 3% while growth softens, the Fed may deliver fewer or later cuts, which pressures long‑duration equities.

What was the government shutdown impact on growth?

Early estimates suggest the shutdown shaved about one percentage point from Q4 growth by reducing government output and chilling services demand. Some activity can bounce back after reopening, but lost output is not always fully recovered. Investors should watch BEA updates for revisions that could adjust the final Q4 growth profile.

What index levels should S&P 500 traders watch now?

Key levels include 6,895 as near‑term resistance aligned with the 50‑day average, 7,000 to 7,020 as the next upside target, and 6,805 as first support. Below that, 6,737 is the next area from Keltner support. ATR near 80 points helps set stops and position sizes around these zones.

What upcoming data could change the market outlook?

January PCE inflation, ISM surveys, and February payrolls are in focus. A cooler core PCE trend would support earlier cuts and higher equity multiples. Hot inflation or weak jobs could deepen growth or pricing concerns. Fed communication will shape expectations around the timing and size of 2026 rate cuts.

Global Market Insights

^GSPC Today: February 21 — 1.4% GDP Miss, 3% Core PCE Test Fed Cuts

ByDanny Kontos February 21, 2026February 21, 2026

US Q4 GDP rose 1.4% annualized, missing the 2.5% forecast, while core PCE inflation held at 3% in December. That mix cools growth but keeps prices firm, testing Federal Reserve rate cuts in 2026. The ^GSPC hovered near 6,861.88 today as traders weighed valuation risk against softer macro data. Early estimates suggest the government shutdown shaved roughly one percentage point from growth. We break down what this means for equity multiples, key index levels, and the next data that could move markets.