1. Executive Summary
- U.S. inflation surprised higher in December, intensifying concerns.
- Federal Reserve officials expressed continued caution on rate cuts amid strong economy signals.
- The Supreme Court invalidated Trump-era tariffs, impacting over $175 billion in revenue.
- Nvidia divested its stake in Arm while pursuing a significant OpenAI investment.
- Nvidia and Meta expanded their multi-year AI infrastructure partnership.
2. 🌍 Global Market
📉 Global Outlook
US Inflation Heats Up, Fed Rate Cut Bets Fade
US Personal Consumption Expenditures (PCE) inflation for December exceeded expectations, yet remains above the Federal Reserve’s 2% target, prompting Atlanta and Dallas Fed Presidents to voice concerns about the strong economy and persistent inflation. This data and hawkish commentary have significantly diminished expectations for early Fed rate cuts, leading the dollar to its best weekly performance since October. Consequently, these inflationary pressures and the Fed’s cautious stance are expected to push back market expectations for interest rate reductions and exert upward pressure on bond yields.
Supreme Court Strikes Down Trump-Era Tariffs
The US Supreme Court ruled against former President Donald Trump’s “reciprocal tariffs” imposed without Congressional approval, a decision that could trigger $100 billion to $175 billion in refunds. While the Court found that the President exceeded his authority under the International Emergency Economic Powers Act (IEEPA), the Treasury indicated it would utilize other trade authorities, such as Sections 232 and 301. This ruling could fundamentally undermine Trump’s trade strategies, leading to immediate declines in Treasury yields and a weaker dollar, though future trade policy uncertainty persists due to the potential for alternative measures.
Escalating Geopolitical Tensions Between US and Iran
The United States has amassed significant military assets, including two aircraft carriers and dozens of fighter jets, near Iran, sharply escalating military tensions in the Middle East. This deployment coincides with reports that former President Trump is considering limited strikes to coerce Iran into a nuclear deal, suggesting a growing risk of military confrontation in the region. Such geopolitical instability is poised to heighten concerns over global energy supply chains and increase volatility across international oil and financial markets.
Oil Prices Respond to Mideast Unrest and Supply Shifts
International oil prices surged to a six-month high, with Brent crude surpassing $71 per barrel, driven by escalating US-Iran geopolitical tensions and mounting concerns over potential Strait of Hormuz closures. Concurrently, global supply dynamics are shifting, with Spain’s Repsol planning to triple Venezuelan oil output after securing a US permit, and a $90 billion Russian oil smuggling ring being exposed. While geopolitical premiums and supply uncertainties will maintain oil price volatility, potential increases in supply could partially offset upward price pressures.
Oil slips back from recent highs; U.S.-Iran conflict in focus – (Investing)
US-China Military Standoff Near South Korea
US and Chinese fighter jets briefly confronted each other in international airspace near South Korea, as reported by Yonhap News Agency. This incident underscores the intensifying military rivalry between the major powers in the Indo-Pacific region and highlights potential flashpoints. Such military encounters can exacerbate regional geopolitical tensions, potentially negatively influencing investor sentiment towards stability in key Asian markets.
🚀 Market (Stock/Indices)
Etsy Divests Depop, Reshapes Portfolio
Etsy sold its second-hand clothing platform Depop to eBay for $1.2 billion, realizing a significant loss from its 2021 acquisition price of $1.62 billion. This strategic move reflects Etsy’s pivot to focus on core business and portfolio re-evaluation as e-commerce growth slows post-pandemic. The divestiture is expected to enhance Etsy’s financial flexibility and strengthen eBay’s position in the pre-owned fashion market.
Walmart Shares Dip on Muted Guidance
Walmart reported better-than-expected Q4 EPS and revenue, driven by strong U.S. comparable store sales and e-commerce growth, yet its stock fell 3% after hours. The decline was triggered by the company’s full-year guidance falling short of analyst estimates, signaling investor concerns about future profitability and growth momentum. This suggests that while Walmart remains a retail powerhouse, its short-term stock performance may be impacted by cautious outlooks.
Amazon Overtakes Walmart in Annual Revenue
Amazon has for the first time surpassed Walmart as the world’s leading company by annual revenue. This milestone underscores Amazon’s relentless expansion across e-commerce, cloud computing (AWS), and digital advertising, enabling it to achieve unprecedented scale. Amazon’s revenue leadership solidifies its dominant position in the global economy and marks a significant shift from traditional retail to diversified digital and tech services.
Bitcoin Futures Hint at Slowing Price Surge
Bitcoin futures data suggests a potential moderation in the cryptocurrency’s recent rapid price appreciation. This indication from the derivatives market often reflects cautious institutional investor sentiment and hedging activities following a substantial rally. The futures market implies that extreme bullish momentum may temper, potentially leading to a more stable or consolidative phase for Bitcoin.
Eric Trump Predicts $1M Bitcoin
Eric Trump reiterated his strong conviction that Bitcoin’s price will ultimately reach $1 million, citing its historical average annual growth of approximately 70% over the past decade. This optimistic long-term outlook is fueled by beliefs in Bitcoin’s increasing adoption, inherent scarcity, and potential as a store of value. Such high-profile endorsements contribute to a positive long-term sentiment among investors, fostering bullish expectations despite short-term volatility.
‘Bitcoin Death Cross’ Fears Resurface
Speculation about a “Bitcoin death cross” has re-emerged, causing a surge in Google searches for “0 dollar fall” amidst heightened market fear. A death cross, a technical analysis pattern, often signals potential downward price momentum, triggering panic among less experienced investors. While technical indicators can influence sentiment, Bitcoin’s fundamental drivers and long-term investor conviction may mitigate severe downside, though short-term volatility could persist due to fear-driven selling.
Global Equity Funds Attract Record Inflows on AI Optimism
Global equity funds recorded their largest inflows in five weeks, with U.S. equity funds leading this significant trend. This surge in investment is largely attributed to an easing of concerns surrounding Artificial Intelligence (AI) and sustained positive market sentiment towards the technology sector. The consistent capital inflow suggests renewed investor confidence in the equity market, particularly in growth-oriented segments, potentially driving further market gains.
European Stocks See Record Inflows as US Tech Alternatives
Investors are funneling record sums into European stocks, with February poised to mark an all-time high in inflows. Global fund managers are actively seeking alternatives to potentially overvalued U.S. tech shares, finding European markets more attractive in terms of valuation. This diversification trend indicates a shift in capital flows as investors seek better value opportunities abroad, which could bolster European equities and temper the dominance of U.S. tech.
Precious Metals Climb Following Tariff Ruling
Precious metals settled higher after a recent tariff ruling, signaling a positive market reaction. The tariff decision likely introduced elements of economic uncertainty or currency fluctuation, traditionally boosting demand for safe-haven assets such as gold and silver. This upward movement suggests that geopolitical and trade policy developments continue to be significant drivers for precious metal prices, warranting close monitoring.
Newmont CEO Prioritizes Margins Amidst Record Gold Prices
Newmont’s CEO emphasized prioritizing margins over being “starry-eyed” about record gold prices, signaling a strong focus on operational efficiency. This strategic stance reflects a disciplined approach to leveraging high gold prices, aiming to maximize profitability through cost control and prudent capital allocation rather than aggressive expansion. The emphasis on margin protection indicates that major gold producers may not significantly increase supply despite elevated prices, potentially supporting sustained high price levels in the long term.
🤖 Tech (AI/Semiconductors)
NVIDIA’s Strategic Portfolio Adjustments
NVIDIA has divested its entire stake in Arm, a UK-based semiconductor design company it once sought to acquire, while reports suggest its potential investment in OpenAI could be adjusted downwards from an initially speculated $100 billion to $30 billion. The Arm divestiture follows a failed acquisition attempt in 2022 due to regulatory hurdles, signaling a strategic refocus, while the OpenAI investment recalibration reflects ongoing fundraising complexities and market dynamics. These portfolio adjustments underscore NVIDIA’s intent to concentrate resources on core AI technology development and strategic partnerships, solidifying its market leadership and standard-setting within the AI ecosystem.
NVIDIA Expands AI Infrastructure Partnerships
NVIDIA is actively expanding its AI ecosystem through strategic collaborations, including an extended multi-year AI infrastructure partnership with Meta and a new alliance with Texas Tech University to build next-generation AI infrastructure. These partnerships are driven by Meta’s accelerating AI development needs and Texas Tech’s demand for advanced research capabilities, enabling NVIDIA to broaden the adoption of its core AI chips and platform. Such collaborations will help NVIDIA secure stable demand for its AI chips, extend its influence across various industries and academic sectors, and reinforce its long-term market dominance.
NVIDIA Broadens Product Portfolio Amid Intensifying Competition
NVIDIA is expanding its product portfolio, enabling general users to run high-performance AI models with its GB10 Superchip, launching the open-source robot world model DreamDojo, and exploring entry into Intel and AMD’s CPU market. This strategic push responds to the increasing everyday use of AI and advancements in robotics, alongside a drive to optimize performance through integrated AI workloads that transcend traditional market boundaries. While these moves position NVIDIA to extend its dominance from AI hardware into software and platforms, securing new growth drivers, the company faces intensifying direct competition from major tech giants like Google.
Google Gemini AI Model and Service Expansion
Google has launched Gemini 3.1 Pro, a next-generation AI model boasting double the reasoning performance, while also integrating AI music generation tools, linking with Google Maps, and expanding data integration for cloud AI agents. These developments are part of Google’s strategic effort to continuously enhance AI model capabilities and strengthen multimodal features, addressing diverse user scenarios and enterprise demands. The rollout of Gemini 3.1 Pro is expected to significantly boost Google’s AI competitiveness and expand its influence in both AI democratization and the enterprise AI solutions market through extensive service integrations.
Advancements in AI Data Center Infrastructure
Demand for AI data centers is fueling improved performance for infrastructure companies like Comfort Systems USA, while Modine projects long-term growth in AI data center cooling systems. This surge is driven by the escalating power consumption and heat generation from high-performance AI chips, necessitating increasingly efficient cooling and power solutions. This trend presents sustained growth opportunities for companies involved in AI data center construction, operation, and advanced cooling technologies, thereby bolstering the physical foundation for AI technology proliferation.
Resurgence of Samsung Exynos and Impact on Korean Semiconductor Ecosystem
Samsung Foundry’s Exynos application processors are slated for integration into the upcoming Galaxy S26 series, sparking optimism for improved earnings among suppliers of related materials and testing solutions. This resurgence is attributed to Samsung Mobile eXperience (MX) division’s decision to re-adopt Exynos coupled with advancements in Samsung’s foundry technology, enhancing the chip’s competitiveness. The revival of Exynos is expected to create significant synergy within Samsung’s internal semiconductor business and positively impact the entire domestic semiconductor materials, parts, and equipment (MPE) ecosystem, driving growth for associated companies.
🌏 Region (China/Eurozone)
German Manufacturing Rebound Boosts Eurozone Activity
German manufacturing activity unexpectedly rebounded, driving broader business activity across the Eurozone and signaling a potential turnaround for the region’s largest economy. The improved performance is attributed to stabilizing energy prices, easing supply chain constraints, and a gradual recovery in global demand, alongside anticipation of shifting monetary policy. A sustained recovery in German manufacturing could bolster the Eurozone’s overall economic momentum, positively impacting European equity markets and potentially alleviating pressure on the ECB regarding immediate interest rate cuts.
China Reroutes Drone Exports to Russia via Thailand to Evade Sanctions
China is reportedly utilizing a new route through Thailand to export drones to Russia, a move interpreted as an attempt to circumvent Western sanctions and highlighting ongoing military cooperation. This redirection of drone exports through a third country became necessary as Western nations intensified sanctions against Russia following the invasion of Ukraine, prompting China to find alternative supply channels. This circumvention strategy is likely to escalate geopolitical tensions and could provoke further sanctions from Western powers against China, introducing increased uncertainty for global trade dynamics and specific technology companies.
By Lan Analyst at 2026-02-21 07:05:00
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.