Macro View - February 23, 2026 (EOD)

 ## Macro Summary Markets closed sharply lower today, weighed down by renewed trade policy uncertainty and mounting concerns over credit risks linked to artificial intelligence (AI) investments. The S&P 500 declined 1.02%, the Dow Jones fell 1.63%, and the Nasdaq 100 dropped 1.03%, reflecting broad-based risk aversion across sectors. The Russell 2000 also retreated 1.56%, signaling small-cap vulnerability amid the risk-off sentiment. Investors grappled with the U.S. Supreme Court’s recent tariff ruling that invalidated some of former President Trump’s tariffs, sparking confusion over trade policy and potential disruption for companies reliant on global supply chains. The market’s negative tone was exacerbated by fresh worries about private credit quality, particularly in the software and AI sectors, where several high-profile earnings and commentary highlighted risks of over-leveraging and slowing demand. This environment prompted a rotation out of growth and tech stocks, with notable declines in software and fintech names, while defensive sectors and commodities like gold and silver saw strong inflows. The combination of tariff uncertainty and credit concerns created a challenging backdrop, overshadowing pockets of strength in healthcare and energy. ## Economic Data Reaction No major economic data releases were reported today, leaving markets to focus on geopolitical and corporate developments. ## Fed & Central Banks Fed commentary remained subdued, with Fed Governor Waller emphasizing that the upcoming jobs report will be more critical than the Supreme Court tariff ruling for the March rate decision. This suggests the Fed remains data-dependent and cautious about adjusting policy amid ongoing economic and geopolitical uncertainties. No new central bank policy moves were announced, but market participants remain attentive to any shifts in tone regarding inflation and growth prospects. ## Rates & Bonds - 20+ Year Treasury (TLT) closed at $89.73, up 0.36% - 7-10 Year Treasury (IEF) closed at $97.44, up 0.36% - 1-3 Year Treasury (SHY) closed at $83.12, up 0.16% The modest rally in Treasuries across maturities indicates a flight to safety as investors sought refuge from equity volatility and trade policy risks. The flattening bias in the yield curve reflects concerns about slower growth ahead and the potential for a more cautious Fed stance. ## Currency & Dollar The U.S. dollar index (UUP) was flat at $27.09, showing little reaction despite the tariff ruling and trade uncertainty. However, reports noted a slight dollar retreat amid renewed trade jitters, which supported gains in the euro and sterling. The dollar’s relative stability helped limit further downside in U.S. equities but did not provide a strong tailwind for risk assets. ## Commodities Wrap - Oil (USO) closed at $80.90, up 0.06% - Gold (GLD) closed at $481.28, up 2.70% - Silver (SLV) surged 5.16% to $80.57 - Natural Gas (UNG) fell 2.25% to $11.74 Gold and silver extended their rally for a fifth consecutive day, driven by tariff uncertainty and geopolitical tensions, particularly around U.S.-Iran talks. The precious metals benefited from safe-haven demand amid equity market weakness and concerns over trade policy. Oil prices were steady, supported by ongoing geopolitical risks but capped by cautious demand outlooks. Natural gas declined despite a powerful winter storm in the U.S. Northeast, reflecting mixed supply-demand dynamics. ## Global Markets Close - Europe: European stocks closed lower, with the DAX leading declines amid heightened U.S. trade uncertainty and tariff worries. The broader STOXX 600 also retreated as investors digested the implications of the Supreme Court ruling and its impact on global trade. - Asia: Asian markets are poised for a cautious open, with mixed signals from overnight futures. The tariff confusion and AI-related credit concerns are expected to weigh on sentiment, although some markets like South Korea and Hong Kong showed resilience earlier amid chip sector optimism. ## Tomorrow's Macro Focus Key catalysts to watch include: - U.S. consumer confidence and inflation expectations data, which will provide insight into underlying demand and price pressures. - Earnings from major tech companies, including Nvidia, which will be closely scrutinized for guidance on AI demand and capital spending. - Further developments in U.S.-Iran nuclear talks and any updates on trade policy or tariff implementation. - Central bank speeches, particularly from ECB and BOJ officials, for clues on monetary policy direction amid global uncertainties. Investors will be monitoring these events for signals on the trajectory of growth, inflation, and risk appetite in the near term.