Macro View - February 07, 2026 (EOD)

 ## Macro Summary Today’s trading was heavily influenced by the ongoing narrative surrounding inflation and interest rate expectations, as investors grappled with the implications of economic data releases and central bank commentary. The markets exhibited volatility, with stocks oscillating between gains and losses as traders digested mixed signals regarding consumer spending and corporate earnings. The Dow Jones Industrial Average finally broke through the 50,000 mark, buoyed by strong performances in selected stocks, particularly in technology and energy sectors, which have benefited from recent price adjustments and strategic shifts. Meanwhile, concerns about a potential slowdown in economic growth loomed large, particularly as the Federal Reserve prepares for its upcoming meeting. The market's focus has shifted to the Fed's likely stance on interest rates, with rising bond yields signaling a more hawkish approach to combating inflation. This backdrop has created a complex environment for equities, as investors weigh the potential for continued growth against the risk of increased borrowing costs. ## Economic Data Reaction - **ISM Services PMI:** 54.1 vs. 53.5 expected - Positive market reaction, supporting the view of economic resilience. ## Fed & Central Banks Federal Reserve officials, including Raphael Bostic, commented on the need to remain vigilant against inflationary pressures, emphasizing that the central bank would not hesitate to implement further rate hikes if necessary. This commentary has led to increased speculation about the Fed maintaining a tighter monetary policy for a longer duration than previously anticipated. The market is closely monitoring any signals from the Fed regarding their next steps, especially as the labor market remains robust. ## Rates & Bonds - 10-Year yield: 3.90%, up 5 basis points - 2-Year yield: 4.75%, up 3 basis points - The yield curve steepened slightly today, indicating a modest increase in long-term rates relative to shorter-term rates, which may reflect growing investor confidence in future economic growth. ## Currency & Dollar The U.S. dollar experienced mild strength against major currencies, influenced by the better-than-expected ISM Services PMI report and ongoing Fed comments. This dollar strength negatively impacted commodities priced in dollars, which often see downward pressure during periods of dollar appreciation. Equities, particularly those with international exposure, faced headwinds as a result. ## Commodities Wrap - Oil: $85.75, up $1.25 - Gold: $1,850.00, down $15.00 - Silver: $24.50, down $0.50 - The rise in oil prices is attributed to supply concerns, while gold and silver prices fell amid a stronger dollar and rising interest rate expectations. ## Global Markets Close - Europe: Major indices finished mixed, with the FTSE 100 gaining 0.5% while the DAX fell by 0.3%. - Asia setup for tonight: Futures suggest a cautiously optimistic tone, with markets anticipating further clarification on global economic conditions. ## Tomorrow's Macro Focus Key economic indicators set to be released include the Non-Farm Payrolls (NFP) report, which will provide insights into the labor market's health and could influence the Fed's monetary policy decisions. Additionally, investors will be watching for any further commentary from Fed officials ahead of their next meeting, as well as updates on inflation metrics that could shift market sentiment.