Macro View - February 19, 2026 (EOD)

 ## Macro Summary Today's trading was heavily influenced by geopolitical tensions, particularly between the U.S. and Iran, which escalated following Trump's warning of potential military action if a deal is not reached within a set timeframe. This has heightened fears of conflict, causing a significant spike in oil prices. The market's reaction was mixed, with risk-off sentiment prevailing as investors flocked to safe-haven assets amid concerns over the geopolitical landscape. The S&P 500 ended lower, reflecting a broader retreat from equities as uncertainties loomed. Economic data added another layer of complexity to the trading environment. The unexpected decline in pending home sales by 0.8% in January, contrasted with previous expectations for growth, raised concerns about the housing market's resilience. This decline, coupled with rising mortgage rates, has made investors wary of the broader economic outlook. The mixed signals from economic indicators and international events have contributed to a cautious sentiment among market participants. ## Economic Data Reaction - **Pending Home Sales:** -0.8% vs. +0.5% expected - The market reacted negatively, reflecting concerns about the housing market's strength and broader economic implications. ## Fed & Central Banks Comments from Fed officials reinforced the cautious tone in the markets. Neel Kashkari emphasized that the Fed is close to neutral on interest rates, suggesting that while there may be some room for cuts, the overall approach is one of caution given the current economic landscape. This aligns with the market's mixed sentiment, as investors weigh the potential for future monetary policy adjustments against the backdrop of geopolitical tensions. ## Rates & Bonds - 10-Year yield: 3.82% (+0.10%) - 2-Year yield: 4.65% (+0.05%) The yield curve remains inverted, with the difference between the 2-year and 10-year yields signaling persistent economic uncertainty. The slight upward movement in yields reflects market apprehension over inflation and the Fed's potential policy direction. ## Currency & Dollar The U.S. dollar strengthened today, reaching near a one-month high, driven by the prospect of stable interest rates and flight-to-safety dynamics amid the geopolitical backdrop. This strength negatively impacted equities, as a stronger dollar typically increases the cost of exports and can dampen corporate earnings. ## Commodities Wrap - Oil: $66.00 (+4.00%) - Gold: $5,000.00 (steady) Oil prices surged due to heightened geopolitical tensions, reflecting a "war premium" as markets anticipate potential disruptions in supply chains. Gold prices have stabilized around the $5,000 level, indicating continued investor interest in safe-haven assets amidst market volatility. ## Global Markets Close - Europe: Major indices closed lower as geopolitical concerns weighed on investor sentiment. - Asia: Markets are set to open lower tonight, tracking Wall Street losses and concerns surrounding U.S.-Iran tensions. ## Tomorrow's Macro Focus Key economic data releases include jobless claims and further insights into the housing market, which will be critical in shaping the market's outlook. Additionally, any further developments regarding U.S.-Iran negotiations will be closely monitored, as they could significantly influence market direction. Fed commentary will also be pivotal as investors seek clarity on future monetary policy actions.