Macro View - February 20, 2026 (EOD)

 ## Macro Summary Today's market was significantly influenced by geopolitical tensions and the aftermath of the U.S. Supreme Court ruling that struck down former President Trump's tariffs. The decision has sparked a wave of optimism in the stock market as investors anticipate reduced costs for businesses, particularly in the retail and e-commerce sectors. Major indices responded positively, with the S&P 500 rising approximately 0.7%, reflecting broad market gains, particularly in consumer discretionary stocks such as **$AMZN** and **$WMT**. Additionally, the ongoing concerns regarding U.S.-Iran relations have influenced trading sentiment, causing fluctuations in oil prices. The threat of conflict has bolstered oil prices to near six-month highs, which may impact inflation expectations and thus the Federal Reserve's monetary policy trajectory going forward. Investors are weighing these geopolitical tensions against the backdrop of potential inflationary pressures, leading to a cautious yet optimistic outlook for the market. ## Economic Data Reaction - **Fourth Quarter GDP:** 1.4% vs. expected 2.0% - The market reacted negatively to the GDP miss, with analysts suggesting that the slower-than-expected growth may temper aggressive rate-cut expectations from the Fed. ## Fed & Central Banks Federal Reserve officials have remained cautious amid the recent inflation indicators, with some suggesting that rate cuts may not be as imminent as previously anticipated. The Fed's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, showed a slight uptick, reinforcing the notion that inflation remains a concern. Market participants are now reassessing their expectations for future monetary policy adjustments based on these recent developments. ## Rates & Bonds - 10-Year yield: 3.57% (+0.05%) - 2-Year yield: 4.07% (+0.03%) - The yield curve remains inverted, indicating that investors continue to expect a slowdown in economic growth, which could lead to future rate cuts by the Fed. ## Currency & Dollar The U.S. dollar showed strength today, primarily driven by safe-haven demand amidst ongoing geopolitical tensions. As the dollar rose, commodities like oil faced upward pressure, complicating the inflation narrative. This dollar strength has generally weighed on commodity prices but has also provided a mixed backdrop for equities as some sectors benefit from lower import costs. ## Commodities Wrap - Oil: Closed at $83.50 (+$2.75) - Prices surged due to heightened tensions between the U.S. and Iran. - Gold: Closed at $1,925.30 (-$15.40) - Gold prices decreased as the dollar strengthened. - Silver: Closed at $24.50 (+$0.10) - Silver managed to hold gains amid a complex market environment. ## Global Markets Close - Europe: European indices closed higher, buoyed by positive sentiment following the tariff ruling, with the FTSE 100 up 0.6%. - Asia: Asian markets are set to open cautiously as they digest the implications of the U.S. market's reaction to the Supreme Court's decision and the ongoing geopolitical landscape. ## Tomorrow's Macro Focus Key focus areas for tomorrow include: - Upcoming inflation data, including the PCE price index, which could further indicate the Fed's path in monetary policy. - Any developments regarding U.S.-Iran relations that may affect commodity prices and investor sentiment. - Earnings reports from key players in the consumer sector, which may provide insights into how companies are navigating the new tariff landscape. In summary, the combination of the Supreme Court's ruling and ongoing geopolitical tensions has set a complex backdrop for market participants, who are recalibrating their strategies in light of these developments.