General Market News

The U.S. economy grew at just 1.4% in the fourth quarter of 2024, significantly below the 3% rate economists had anticipated, according to the Commerce Department's Bureau of Economic Analysis. This marks a notable deceleration from the third quarter's stronger growth performance.

• Fourth quarter GDP growth of 1.4% fell well short of the 3% consensus forecast from economists surveyed by LSEG
• The 1.4% growth rate represents a slowdown from the third quarter's pace, signaling potential economic cooling
• The advance estimate covers the period from October through December 2024

The US economy grew at an annualized rate of 1.4% in Q4 2025, significantly below the 2.9% forecast, causing US stock futures to decline. The Bureau of Economic Analysis attributed the slowdown to reduced government spending (which cut 0.9 percentage points from growth), lower exports, and softer consumer activity following a 43-day government shutdown. Full-year 2025 GDP growth was 2.2%, down from 2.8% in 2024.

• Stock futures fell sharply, with Nasdaq expected to open 0.5% lower, S&P 500 down 0.33%, and Dow down 0.25%
• Private sector spending and fixed investment grew at a healthier 2.4%, with AI-related equipment investment contributing 0.65 percentage points to overall growth
• President Trump blamed the shortfall on the government shutdown and called for lower interest rates ahead of the data release

U.S. GDP growth in the fourth quarter came in at just 1.4% annualized, significantly below the 2.5% consensus estimate from Dow Jones. This represents a notable slowdown in economic activity and marks a substantial miss against analyst expectations.

• GDP growth of 1.4% fell 1.1 percentage points short of the 2.5% forecast, indicating weaker-than-expected economic performance
• The core PCE price index, a key inflation measure, was expected to increase 3% year-over-year in December
• The disappointing growth figure suggests potential economic headwinds heading into the new year

The Federal Reserve's core PCE inflation gauge rose 3% year-over-year in Q4, exceeding expectations, while GDP growth slowed sharply to 1.4% from 4.4% in Q3. The hotter-than-expected inflation data and cooling economic growth have reduced market expectations for near-term Fed rate cuts, with only 20% odds of a cut by April and 56% by June.

• Core PCE inflation rose 0.4% monthly and 3% annually, above forecasts of 0.3% and 2.9%, signaling persistent price pressures
• Q4 GDP growth tumbled to 1.4% from Q3's 4.4%, missing the 2.8% forecast, partly due to a 5.1% drop in government spending from the shutdown
• Market odds of a Fed rate cut by the April 29 meeting stand at just 20%, with June odds at 56%, as inflation remains elevated above the Fed's 2% target

US stock futures declined Friday morning, led by a 0.2% drop in Nasdaq contracts, as investors monitored escalating US-Iran tensions that pushed oil prices up 18.5% year-to-date. Markets awaited key economic data releases including Q4 GDP figures and the PCE inflation index, the Federal Reserve's preferred inflation gauge, both scheduled for 8:30am EST.

• Oil prices surged due to US military buildup in the region amid Iran tensions, while gold rose on defensive positioning
• Deutsche Bank forecasts Q4 GDP growth at 2.5% annualized (below consensus 2.8%) and core PCE inflation accelerating to 0.4% from 0.2% in November
• Upcoming PCE data expected to reinforce market expectations that the Federal Reserve will maintain current interest rates

U.S. stock index futures edged higher on Friday, February 20, 2026, as traders awaited critical GDP and PCE inflation data that could influence Federal Reserve policy. Markets were also monitoring a Supreme Court decision on the legality of Trump's tariffs under the International Emergency Economic Powers Act. The S&P 500 and Nasdaq were attempting to preserve weekly gains amid technical resistance levels.

• S&P 500 faces a resistance cluster at 6888.89 to 6915.65, with the 50-day moving average at 6894.82 acting as a key technical barrier after Wednesday's rejection at 6909.12.
• Nasdaq Composite must break through triple resistance at 23307.57 (50-day MA), 23320.62, and 23326.83 to shift momentum upward, with downside support at 22256.76 within a major retracement zone.
• The Dow Jones remains in an uptrend unlike the S&P 500 and Nasdaq, with its 50-day moving average at 48961.84 providing key support and upside targets at 50372.00 and the all-time high of 50512.79.

UK retail sales volumes surged 1.8% in January 2026, the strongest monthly increase since May 2024, according to the ONS. The growth was driven by automotive fuel recovery, non-food stores, and a 14.7% year-on-year jump in online spending, the highest since April 2021. Economists view this as a sign of stabilizing consumer activity after a period of uncertainty.

• Year-on-year sales volumes rose 4.5% in January, with three-month sales up 2.6% compared to the same period a year earlier
• Online retail spending increased 14.7% year-on-year, the strongest annual growth since April 2021, with sports supplements and jewellery hitting record demand
• Automotive fuel and non-food stores led the recovery, including gains in household goods, computer retailers, and auction houses, partially offset by small declines in supermarkets and department stores

A JPMorgan Chase Institute report reveals that U.S. midsize business payments to Chinese firms dropped approximately 20% from 2024 to 2025 as Trump administration tariffs on China reached 37.4% by October 2025. Meanwhile, payments to other Asian countries including Southeast Asia, Japan, and India increased, suggesting potential import substitution, while monthly tariff payments by midsize firms tripled to roughly $300 billion per month by late 2025.

• Payments from U.S. midsize firms to China fell 20% year-over-year even as overall international payments remained steady, with China's effective tariff rate reaching 37.4% in October 2025
• Trade flows shifted to other Asian regions, with experts noting potential transshipment concerns particularly from Vietnam and Taiwan, where Chinese goods may be relabeled or minimally processed before U.S. export
• Monthly tariff payments by midsize firms surged from $100 billion in early 2025 to approximately $300 billion by year-end, tripling the cost burden following tariff implementation in April 2025

At least three ETF providers have filed proposals to launch exchange-traded funds that would hold event contracts tied to U.S. election outcomes, similar to products on platforms like Kalshi and Polymarket. The filings signal the investment industry's move to make prediction markets accessible to institutional investors, not just individuals, potentially legitimizing this asset class much like ETFs did for cryptocurrency. SEC approval remains uncertain, but the development comes amid growing interest from major exchanges like CME Group and Cboe Global Markets in event-based contracts.

• Roundhill Investments, Bitwise Asset Management, and Granite have filed for ETFs holding binary election outcome contracts for Democratic or Republican control
• If election outcomes go against the ETF strategy, funds could 'substantially lose all of its value' according to SEC filings
• Major institutions are entering the space: CME partnered with FanDuel for prediction markets, Cboe is reportedly in talks with retail brokerages, and Tradeweb partnered with Kalshi to provide data to institutional clients

The US trade deficit declined slightly to $901 billion in 2025 from $904 billion in 2024, despite President Trump imposing tariffs on imports from most countries. However, the goods trade deficit hit a record $1.24 trillion as companies increased imports of computer chips and tech goods, while the overall deficit remained the third-highest on record.

• The goods trade deficit with China plunged 32% to $202 billion, but trade shifted to other countries with Taiwan's deficit doubling to $147 billion and Vietnam's jumping 44% to $178 billion
• US imports rose nearly 5% and exports increased 6% in 2025, with the trade gap surging January-March as companies front-loaded imports ahead of Trump's tariffs
• The US ran a larger services trade surplus of $339 billion in 2025, up from $312 billion in 2024, while the goods deficit with Mexico widened to $197 billion

OpenAI is finalizing a funding round exceeding $100 billion at an $830 billion valuation, with investors including Amazon, SoftBank, and Nvidia. The funding could provide relief to AI stocks like Oracle, Microsoft, CoreWeave, and Nvidia that have been pressured by concerns over whether OpenAI can meet its massive data center capacity commitments. With up to $40 billion currently on hand plus this new capital, OpenAI would have a multiyear runway to scale operations and maintain ChatGPT's lead over Google's Gemini.

• OpenAI has granted an estimated $1 trillion in revenue commitments to AI chip and data center capacity providers, prompting companies like Oracle and CoreWeave to borrow heavily to fund infrastructure build-outs
• AI stocks have underperformed in 2026: Microsoft down 17%, Oracle down 19%, CoreWeave up 32% but well below its June 2024 high, while Nvidia remains roughly flat for the year
• Rival Anthropic recently raised $30 billion at a $380 billion valuation, while speculation suggests OpenAI could pursue an IPO in 2026 or 2027 to raise additional capital

The final week of February 2026 brings critical economic data releases and major earnings reports. Key inflation data through the Producer Price Index (PPI) for January will be released Friday, alongside delayed economic indicators. Major Dow components including Home Depot, Nvidia, and Salesforce will report quarterly earnings during the week.

• PPI and core PPI for January release Friday, Feb. 27, along with construction spending data for November and December, and Chicago PMI
• Notable earnings reports include Dow members Home Depot, Nvidia, and Salesforce, plus Dell Technologies, Domino's Pizza, Lowe's, HP, Snowflake, and TJX
• Multiple Federal Reserve officials scheduled to speak throughout the week, including Governor Christopher Waller, Chicago Fed President Goolsbee, Fed President Bostic, and Governor Lisa Cook

U.S. stocks are experiencing their worst start to a year relative to global markets since 1995, with international equities significantly outperforming domestic indexes in 2026. The MSCI World ex-USA Index is up 8.2% year-to-date, nearly six percentage points ahead of the equivalent index including U.S. stocks. This reversal follows years of U.S. market dominance and has accelerated from a trend that began in 2025.

• Since early 2025, major European, Asian developed market, and emerging market indexes have all more than doubled the S&P 500's approximately 17% return over that period
• The Magnificent Seven tech stocks, which drove recent U.S. market gains, are now a drag with the Roundhill ETF down over 6% in 2026, while Korea's KOSPI has surged nearly 35% in six weeks on AI-related spending
• Elevated U.S. valuations, economic uncertainty, foreign stimulus measures, and a weakening dollar have contributed to the shift, prompting U.S. investors to look overseas for stronger returns

U.S. crude oil inventories dropped by 9 million barrels in the week ending February 13, far exceeding analyst expectations of a 2.1 million-barrel increase, according to the Energy Information Administration. Gasoline and distillate stocks also fell more sharply than anticipated, with distillates declining by 4.6 million barrels versus the expected 1.4 million-barrel drop.

• Crude inventories fell to 419.8 million barrels, with the Cushing, Oklahoma hub declining by 1.1 million barrels
• Gasoline stocks dropped 3.2 million barrels to 255.8 million barrels, far exceeding the expected 0.3 million-barrel draw
• Refinery utilization rates increased by 1.6 percentage points to 91%, while net U.S. crude imports fell by 1.13 million barrels per day

The U.S. trade deficit reached $901.5 billion in 2025, down only 0.2% ($2.1 billion) from 2024, despite President Trump's aggressive tariff policies aimed at reducing the imbalance. The December deficit swelled to $70.3 billion, significantly above expectations, as Trump's tariff strategy showed limited impact on closing the trade gap.

• December's trade deficit of $70.3 billion exceeded the Dow Jones consensus estimate of $55.5 billion by $14.8 billion and marked a $17.3 billion increase from November
• The largest goods deficits were with the European Union ($218.8 billion), China ($202.1 billion), and Mexico ($196.9 billion)
• Companies front-loaded imports in early 2025 to avoid tariffs, though October saw the lowest monthly deficit since 2009 before the December surge

U.S. stock futures dipped slightly after a three-day rally, with the S&P 500 and Dow futures down 0.3% amid investor concerns about Federal Reserve rate policy and mixed corporate earnings. Walmart disappointed with a weaker-than-expected outlook, while OpenAI is reportedly seeking up to $100 billion in new funding from tech giants including Nvidia and Microsoft. Commodity markets showed movement with crude oil reaching its highest level since last summer at $66.20 per barrel on Iran strike concerns.

• Walmart stock fell after forecasting Q1 sales growth of 3.5%-4.5% and adjusted EPS of $0.63-$0.65, both below analyst expectations, as investors assess new CEO Doug McMillon's direction
• OpenAI is negotiating a funding round that could reach $100 billion at an $850 billion valuation, driven by hundreds of billions in hardware and cloud computing commitments as its AI products remain years from profitability
• DoorDash shares surged despite weak Q4 results after gross order value of $29.7 billion and current quarter outlook exceeded analyst consensus, offsetting integration costs from combining its three global delivery platforms

The S&P 500 Index is trading near all-time highs while the Cboe Volatility Index (VIX) has risen to around 20, an unusually elevated level for such market conditions. Historical data shows that when the SPX closes within 2% of record highs with VIX above 20, the index averaged 3.71% gains over three months versus just 1.47% when VIX was below 20. However, the sustainability of future rallies may depend on whether the VIX remains elevated or quickly retreats.

• A high VIX near market highs suggests significant hedging activity and skepticism rather than euphoria, indicating investors are not fully invested and have buying power on the sidelines
• Historical analysis shows stronger returns at all timeframes when VIX was above 20 near market highs, driven by larger upside moves rather than frequency of positive returns
• Short-term outlook (one month) shows outperformance with 0.93% average return and 74% positive rate, but three-month to one-year returns turn bearish if VIX quickly retreats to lower levels

White House economic advisor Kevin Hassett called for Federal Reserve economists to be 'disciplined' after they published research showing U.S. businesses and consumers bear 86% of tariff costs. Hassett described the New York Fed paper as 'an embarrassment' and 'the worst paper I've ever seen in the history of the Federal Reserve system,' claiming its conclusions are partisan and methodologically flawed.

• The New York Fed study found U.S. firms and consumers absorbed 86% of tariff burden as of November 2025, with foreign exporters bearing only 14%, while average tariff rates jumped from 2.6% to 13% during 2025
• The Congressional Budget Office reached similar conclusions, finding foreign exporters absorb about 5% of tariff costs and projecting tariffs will increase PCE inflation by 0.8 percentage points by end of 2026
• Hassett defended the tariffs by claiming 'prices have gone down' and consumers are 'better off,' with real wages up $1,400 on average last year, contradicting the Fed researchers' findings

Sen. Elizabeth Warren urged the Treasury Department and Federal Reserve not to use taxpayer funds to bail out cryptocurrency billionaires as bitcoin has dropped nearly 60% in value since its October high. The Massachusetts Democrat warned that such intervention could enrich President Trump and his family's crypto company, World Liberty Financial, while transferring wealth from taxpayers to crypto investors.

• Warren requested confirmation from Treasury Secretary Scott Bessent and Fed Chair Jerome Powell that no taxpayer money would be used for crypto bailouts through direct purchases, guarantees, or liquidity facilities
• Major crypto investors have suffered massive losses during the selloff, including Binance founder Changpeng Zhao (reportedly $30 billion) and Coinbase's Brian Armstrong ($7 billion)
• Trump's World Liberty Financial sold around 173 wrapped Bitcoin to repay $11.75 million in debt and avoid liquidation, highlighting conflicts of interest concerns raised by Warren

The Federal Reserve's January meeting minutes revealed growing internal debate over future rate moves, with some officials signaling openness to rate hikes if inflation remains elevated. The FOMC voted 10-2 to hold rates at 3.5%-3.75%, with two governors dissenting in favor of cuts. Inflation remains above the Fed's 2% target, with PCE at 2.8% in November and tariffs contributing to price pressures.

• Several Fed officials supported adding language about potential rate hikes to policy statements if inflation stays above target levels
• PCE inflation reached 2.8% in November 2025, the highest since October 2023, with core PCE also at 2.8%
• Fed Chair Powell noted that core PCE would be 'just a bit above 2%' without the inflationary effects of tariffs imposed on Liberation Day