1. Executive Summary
- Nvidia fully divested its stake in Arm.
- Nvidia aggressively expands AI partnerships and hints at groundbreaking new chips.
- US weekly jobless claims fell sharply, signaling labor market strength.
- The US trade deficit widened, and Q4 GDP growth was revised lower.
- Fed minutes showed renewed inflation worries, with some officials considering rate hikes.
2. 🌍 Global Market
📉 Global Outlook
📉 Macro (Economy/Rates)
Fed’s Hawkish Stance and Bond Market Reaction
The January FOMC minutes revealed renewed inflation concerns among some officials, with a few even pondering a rate hike, leading to a rise in U.S. Treasury yields. This hawkish tilt reflects the Federal Reserve’s apprehension about persistent inflationary pressures and robust economic data, dampening market expectations for imminent rate cuts. Markets are pricing in a delayed timeline for rate reductions, suggesting continued volatility in bond markets as investors adjust to a more cautious Fed stance.
Fed Reveals Surprise Shift as Several Officials Ponder Hike – (Bloomberg)
Continued Strength in US Labor Market
U.S. weekly jobless claims dropped by 23,000 to 206,000, marking the largest decline since November and falling below market expectations. This indicates a resilient labor market where employers are largely retaining staff amidst stable economic conditions. Strong employment figures could reinforce the Federal Reserve’s cautious stance on monetary easing, potentially further delaying anticipated interest rate cuts.
Expansion of US Trade Deficit
The U.S. annual trade deficit swelled to $901.5 billion last year, marking one of its largest gaps since 1960, driven by a surge in imports. This expansion primarily stems from robust domestic demand fueling import growth, while export expansion lagged comparatively. A widening trade deficit might temper some dollar strength, yet the underlying strong domestic consumption could sustain inflationary pressures, complicating the Fed’s path toward monetary easing.
Downward Revision of US Q4 GDP Growth
The Atlanta Fed’s ‘GDPNow’ model significantly lowered its estimate for Q4 U.S. economic growth from 3.6% to 3.0% just one day before the official release. This revision reflects the incorporation of recent economic data, suggesting a potential moderation in growth momentum compared to earlier projections. While the downward revision might slightly ease concerns about an overheating economy, the growth rate remains robust, likely having only a limited impact on immediate rate-cut expectations.
US-Iran Geopolitical Tensions and Rising Oil Prices
Geopolitical tensions between the U.S. and Iran have intensified, driving up global oil prices and fueling broader inflation concerns. This reflects market anxieties over potential supply disruptions in the Middle East, leading to increased uncertainty regarding crude oil availability. Sustained geopolitical risks are expected to keep upward pressure on oil prices, potentially influencing central bank decisions on the pace of rate cuts and dampening inflation moderation hopes.
Strong Demand for US 30-Year TIPS
A $9 billion auction of 30-year U.S. Treasury Inflation-Protected Securities (TIPS) drew robust demand, resulting in a yield significantly below market expectations. This strong investor appetite indicates a persistent demand for long-term inflation hedges, suggesting that inflation expectations remain embedded in the market. Sustained TIPS demand underscores the market’s awareness of long-term inflation risks, reinforcing that the inflation trajectory will remain a critical factor in the Federal Reserve’s policy decisions.
Stability in the Gold Market
Gold prices remained largely stable despite rising geopolitical tensions between the U.S. and Iran, with investors largely focused on upcoming inflation data. Geopolitical risks offered some support to gold, but market participants adopted a wait-and-see approach, keenly awaiting inflation figures that could influence the Fed’s monetary policy. Gold is expected to retain its safe-haven appeal amid geopolitical uncertainties, though its short-term price movements will likely be highly sensitive to forthcoming inflation reports.
Decline in Copper Prices
Copper prices declined following the release of the Fed’s January FOMC minutes, which indicated officials’ caution regarding interest rate cuts. The hawkish Federal Reserve stance heightened concerns about potential economic growth slowdowns, consequently implying reduced industrial demand for the metal. A prolonged period of tight monetary policy from the Fed could continue to weigh on industrial metal prices like copper, creating uncertainty for demand-side fundamentals.
US Uranium Policy Shift
The U.S. announced its intent to phase out Russian uranium and is pursuing a $2.25 billion initiative to restore an independent domestic nuclear fuel supply chain, impacting major commodity markets. This strategic move by the Biden administration aims to bolster energy security and reduce reliance on Russia following its invasion of Ukraine. This policy shift is expected to accelerate the restructuring of the global uranium supply chain and could create long-term opportunities for non-Russian uranium producers.
🚀 Market (Stock/Indices)
U.S. Equities Decline Amid Market Instability
U.S. major indices broadly declined due to a combination of factors, including a pullback in NVIDIA and private equity stocks, a rise in oil prices (Brent above $70), and geopolitical concerns related to Iran. This downturn was exacerbated by diminished rate-cut expectations following the January FOMC minutes, leading the ‘Wall Street Fear Index’ (VIX) to again surpass 20, amplifying market anxiety. Investors are showing increased sensitivity to geopolitical risks and monetary policy uncertainties, suggesting elevated market volatility may persist in the near term.
Sustained Foreign Investment in U.S. Assets
Foreign investors continued to acquire U.S. assets, making net purchases of $1.6 trillion, thereby resisting a “Sell America” narrative. This influx of foreign capital reflects confidence in the long-term growth potential and attractiveness of the U.S. economy, separate from recent market downturns. The sustained global capital inflow indicates that the U.S. market remains a compelling investment destination, potentially serving as a supportive foundation for U.S. asset markets going forward.
Bitcoin Price Correction and Extreme Fear Sentiment
Bitcoin’s price dipped back below 100 million Korean Won (approximately $75,000 USD equivalent) after a brief recovery during the Lunar New Year holiday, pushing the Crypto Fear & Greed Index to an “extreme fear” level of 8. This price adjustment stemmed from hawkish interpretations of the January Federal Open Market Committee (FOMC) meeting minutes, which reignited concerns about potential interest rate hikes and dampened investor appetite for high-risk assets. Consequently, the Bitcoin market is expected to remain highly sensitive to macroeconomic indicators and shifts in monetary policy, maintaining elevated volatility for the foreseeable future.
🤖 Tech (AI/Semiconductors)
NVIDIA’s AI Chip Strategy and Partnership Expansion
NVIDIA has divested all its shares in British chip designer Arm, which it once sought to acquire, while CEO Jensen Huang teased “chips the world has never seen before” for GTC. This strategic move appears to reallocate capital towards core AI chip development and direct industry partnerships. NVIDIA is poised to solidify its dominance in the AI hardware market and accelerate integration across various sectors, leveraging resources from the Arm divestment and upcoming next-generation chips.
AI Industry Investment, Tech Development & Market Trends
OpenAI’s latest funding round is projected to exceed $100 billion, while chip startup Taalas raised $169 million to develop AI chips challenging NVIDIA. Concurrently, Wall Street is accelerating the “financialization of AI” by exploring GPU derivatives and collateralized debt based on computing power. This massive capital injection underscores the critical need for AI infrastructure and indicates a rapidly maturing and expanding AI industry. Expect heightened technological innovation and financial product structuring across the AI hardware and software ecosystem going forward.
Freeform Lands $67M Series B for AI-Powered Laser Manufacturing – (The Tech Buzz)
Tesla Commences Production of Cybercab Robotaxi
Tesla has officially rolled out its dedicated self-driving robotaxi, Cybercab, from the Giga Texas production line, a model designed without a steering wheel or pedals for full autonomy. This move signifies Tesla’s aggressive shift from its limited Model Y-based robotaxi service towards a fully driverless system. While Cybercab’s commercialization holds the potential to disrupt traditional transportation, its success hinges on securing regulatory approvals, rigorous safety validation, and gaining widespread public trust.
Major Semiconductor Firms and Memory Supply Chain Updates
TSMC confirmed up to $56 billion in capital expenditure this year, commencing construction of five fabs simultaneously, driven by robust AI demand, while Intel shares slid as Meta reportedly secured more NVIDIA AI chips. Simultaneously, memory supply shortages, particularly for High-Bandwidth Memory (HBM), continue to intensify due to surging AI chip demand, boosting stock prices for major memory manufacturers like Samsung Electronics and SK Hynix. This dynamic indicates that an AI-centric semiconductor market is highly favorable for foundries and memory providers, yet poses competitive challenges for traditional Integrated Device Manufacturers (IDMs).
🌏 Region (China/Eurozone)
IMF Urges China to Shift to Consumption-Led Growth
The International Monetary Fund (IMF) has advised China to transition its economy from an investment and export-driven model to one led by consumption. This recommendation comes as China’s traditional growth strategy faces mounting domestic structural challenges and global trade tensions. A successful pivot could foster more sustainable long-term growth for China, whereas a failure might exacerbate internal imbalances and global economic uncertainty.
Global Shipping Industry Consolidates with Key Acquisition
Germany’s fifth-largest shipping company has acquired the tenth-largest firm, signaling a potential wave of consolidation within the global shipping industry. This strategic move likely aims to boost operational efficiency, expand market share, and navigate persistent challenges such as overcapacity and volatile freight rates. Increased M&A activity in the sector could lead to higher market concentration, potentially stabilizing freight prices and improving profitability for major players.
By Lan Analyst at 2026-02-20 07:10:47
This report is for informational purposes only and does not constitute investment advice.
While based on reliable sources, accuracy is not guaranteed.
All investment decisions are the sole responsibility of the investor.