Macro View - February 14, 2026 (EOD)

 ## Macro Summary Today's trading was heavily influenced by macroeconomic signals indicating a potential shift in the Federal Reserve's monetary policy stance. Investors reacted to recent inflation data that suggested a cooling trend, which some analysts interpreted as a sign that the Fed may consider rate cuts sooner than previously anticipated. This sentiment fueled a rally in equities, particularly in sectors sensitive to interest rate changes, such as technology and consumer discretionary. Moreover, concerns about global economic stability were heightened by geopolitical tensions, particularly surrounding Iran and the ongoing conflict in Ukraine. These geopolitical factors added a layer of uncertainty to market sentiment, leading to a mixed performance in global markets. While some investors sought safety in defensive stocks and bonds, others were drawn to riskier assets, betting on a rebound from the recent lows. ## Economic Data Reaction - **January CPI Inflation:** 0.2% increase vs. 0.4% expected - Markets reacted positively, with equities rallying in anticipation of a dovish Fed response. ## Fed & Central Banks The Federal Reserve's latest commentary suggested that officials are closely monitoring inflation trends. The recent CPI reading has led some market participants to speculate about potential rate cuts as early as mid-2026. Fed Chair Jerome Powell emphasized the importance of data dependence, indicating that future monetary policy will be guided by incoming economic signals. This dovish tone has contributed to bullish sentiment in equity markets. ## Rates & Bonds - 10-Year yield: 3.40% (down 10 basis points) - 2-Year yield: 4.00% (down 8 basis points) - The yield curve has steepened slightly, indicating that investors expect a more accommodative Fed policy in the near future. ## Currency & Dollar The U.S. dollar showed signs of weakness today, which provided a boost to commodities and emerging market equities. The dollar index fell by 0.5%, reflecting market expectations for potential rate cuts. This depreciation in the dollar helped to support equities, particularly in sectors that benefit from a weaker dollar, such as materials and energy. ## Commodities Wrap - Oil: Closed at $75.00 per barrel, down $1.50 - Gold: Closed at $1,850 per ounce, up $20 - Notable moves included a rally in silver, which surged by 3%, driven by increased investor demand for precious metals as a hedge against inflation. ## Global Markets Close - Europe: The STOXX 600 finished up 1.2%, with tech and consumer discretionary sectors leading gains. - Asia setup for tonight: Asian markets are expected to open higher, driven by positive sentiment from U.S. market performance and easing inflation concerns. ## Tomorrow's Macro Focus Key data to watch includes the Producer Price Index (PPI) and initial jobless claims, which will further inform the Fed's outlook on inflation and employment. Additionally, any remarks from Federal Reserve officials regarding monetary policy will be closely scrutinized by investors for signals of future rate adjustments.