Macro View - February 23, 2026 (Morning)

 ## Macro Snapshot Markets are digesting a complex mix of geopolitical, monetary policy, and economic developments as we head into the new trading day. The U.S. Supreme Court’s recent ruling striking down some of former President Trump’s tariffs has injected fresh uncertainty into trade policy, prompting a notable retreat in the dollar and a cautious tone in risk assets. This ruling, coupled with the threat of new tariffs and ongoing trade disputes, is creating a challenging backdrop for global commerce and supply chains. The uncertainty is weighing on investor sentiment, particularly in sectors sensitive to trade and manufacturing. On the monetary policy front, Federal Reserve Governor Christopher Waller’s comments overnight have underscored the conditional nature of the Fed’s next move, emphasizing that the March rate decision hinges heavily on the upcoming U.S. labor market data. This suggests the Fed remains data-dependent and cautious about prematurely signaling a rate cut. Meanwhile, the Bank of Japan is also in focus, with speculation rising that it may raise rates in March if the yen continues to weaken, signaling a potential shift in its ultra-loose policy stance. These central bank dynamics are influencing global bond markets and currency flows, contributing to a nuanced macro environment. Commodity markets are reflecting these macro tensions as well. Gold has surged by 3.12% to $473.92, benefiting from tariff-related uncertainty and safe-haven demand, while silver has jumped an even more dramatic 10.20% to $78.25. Oil prices are modestly higher, up 0.20% to $81.35, as geopolitical risks around U.S.-Iran talks and supply concerns persist. Natural gas also saw a 2.29% rise amid a powerful winter storm impacting the U.S. Northeast, highlighting ongoing energy market volatility. ## Overnight Global Markets - **Asia:** Asian equities showed mixed performance amid trade jitters stemming from the U.S. Supreme Court tariff ruling. South Korea’s markets advanced, supported by strong AI-led electronics exports and chip sector optimism, while Hong Kong also gained ground. However, broader regional caution prevailed due to ongoing tariff uncertainty and geopolitical concerns. The Indian rupee’s rebound is noted but still requires stronger foreign inflows to sustain momentum. ## Economic Data Today No major U.S. economic releases are scheduled for today, leaving markets to focus on geopolitical developments and corporate earnings previews. Attention will be on the labor market data expected next week, which is shaping Fed expectations. ## Fed & Central Banks Fed Governor Waller reiterated that the Fed’s March rate decision is contingent on the labor market’s trajectory, signaling no definitive commitment to a rate cut yet. This cautious stance suggests the Fed is maintaining flexibility amid mixed economic signals. The Bank of Japan is reportedly considering a rate hike in March if the yen’s depreciation continues, which would mark a notable policy shift from its longstanding ultra-accommodative stance. The ECB and other major central banks remain relatively quiet ahead of upcoming policy meetings, but trade-related uncertainties are likely to influence their outlooks. ## Rates & Currencies U.S. Treasury yields showed modest movement overnight. The 7-10 Year Treasury ETF (IEF) rose 0.12% to $97.21, indicating slight upward pressure on intermediate yields, while the 20+ Year Treasury ETF (TLT) edged down 0.07% to $89.56, reflecting mixed demand for longer-duration bonds. Short-term yields, as represented by the 1-3 Year Treasury ETF (SHY), inched up 0.05% to $83.02, suggesting some caution around near-term monetary policy. The U.S. dollar weakened slightly, with the UUP ETF down 0.25% to $27.05, pressured by the Supreme Court’s tariff ruling and renewed trade policy uncertainty. This dollar softness is supporting commodity prices and providing some relief to emerging markets but is also contributing to volatility in currency-sensitive sectors. Equities in the U.S. showed modest gains in major indices, with the S&P 500 (SPY) up 0.44% to $687.47 and the Nasdaq 100 (QQQ) rising 0.43% to $606.08. The Dow Jones (DIA) was nearly flat, up 0.04% to $494.57, while the Russell 2000 (IWM) lagged, down 0.51% to $263.25, reflecting small-cap sensitivity to trade and economic uncertainty. ## Commodities Gold and silver experienced significant rallies amid tariff jitters and safe-haven demand. Gold’s 3.12% gain to $473.92 and silver’s 10.20% surge to $78.25 highlight investor concerns about trade policy and inflation risks. Oil prices edged up modestly to $81.35, supported by geopolitical tensions around U.S.-Iran nuclear talks and supply-side considerations. Natural gas prices also rose 2.29% to $12.07, driven by a severe winter storm impacting the U.S. Northeast and boosting heating demand. ## Macro Risks to Watch - **Trade Policy Uncertainty:** The U.S. Supreme Court’s tariff ruling and ongoing threats of new tariffs are creating significant uncertainty for global trade flows, supply chains, and corporate planning. - **Federal Reserve Rate Decision:** The upcoming U.S. labor market report will be critical in determining whether the Fed pivots toward rate cuts in March, with implications for risk assets and bond markets. - **Geopolitical Tensions:** U.S.-Iran nuclear negotiations and Middle East geopolitical risks remain a wildcard for energy markets and global risk sentiment. ## Positioning Implications Traders should approach the market with caution given the elevated trade policy uncertainty and the Fed’s data-dependent stance. The dollar’s recent softness and the surge in precious metals suggest a tilt toward safe-haven assets amid geopolitical and tariff-related risks. Equities may continue to see rotation, with large-cap tech and AI-related names showing resilience, while small caps and trade-sensitive sectors could face headwinds. Monitoring the labor market data and any further developments on tariffs will be key to adjusting positioning in the near term. Risk management remains paramount as markets navigate this complex macro environment.