General Market News

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

Robinhood is launching a closed-end fund (ticker: RVI) to give retail investors access to private company investments, with a $25 minimum buy-in. The move comes as some institutional investors are reducing private equity allocations due to underperformance, raising questions about whether democratizing access to this asset class benefits average investors.

• The Robinhood Venture Fund will charge a 3.125% sales load and 2% annual fee, with one expert estimating the portfolio must outperform by roughly 13% just for investors to break even after accounting for fees and typical closed-end fund discounts to net asset value
• Major institutions are pulling back from private equity: Oregon and Washington state pension funds lowered allocations, while Princeton reduced return expectations and Harvard is cashing out holdings early as private investments lag the S&P 500
• Academic research shows private equity funds have returned about the same as broad market indexes since 2006, while collecting an estimated $230 billion in performance fees between 2006 and 2015

Federal Reserve officials signaled caution on further interest rate cuts until inflation moves closer to the 2% target, according to minutes from the January 28 FOMC meeting. The Fed expects above-potential GDP growth through 2028, driven by AI-related investment and productivity gains, but remains concerned about inflation persistence and financial stability risks. Analysts anticipate the next rate cut may not occur until June 2026 at the earliest.

• FOMC staff projects real GDP growth exceeding potential through 2028, with unemployment falling below the natural rate, supported by AI investment and consumer spending
• Some Fed participants favored a two-sided policy approach, leaving open the possibility of rate increases if inflation remains elevated
• The Fed flagged financial stability risks from concentrated AI-related gains, high asset valuations, tight credit spreads, leveraged hedge funds, and vulnerabilities in private credit markets

Federal Reserve officials are deeply divided on future interest rate cuts, with many wanting to see further inflation decline before supporting additional cuts this year. The Fed held its key rate steady at 3.6% in January after three cuts in late 2024, with two officials dissenting in favor of another quarter-point cut. The division reflects differing views on the economy, with some favoring a prolonged pause while others support continued cuts if inflation keeps declining.

• The Fed's preferred inflation measure is running at roughly 3%, above the 2% target, while the unemployment rate fell to 4.3% in January as employers added 130,000 jobs, the biggest gain in over a year
• Multiple camps emerged among officials: 'several' support cuts if inflation declines, 'some' favor keeping rates unchanged for an extended period, and 'several' wanted language signaling potential rate hikes
• The stance marks a shift from previous meetings, with some officials now open to potential rate hikes despite President Trump's demands for cuts to as low as 1%

Federal Reserve officials showed significant disagreement at their January meeting about the future direction of interest rates, with some supporting further cuts if inflation declines while others favored holding rates steady or even considering hikes. The Fed kept its benchmark rate at 3.5%-3.75% after three consecutive cuts totaling 0.75 percentage points in late 2024. The division reflects tensions between controlling inflation, which remains around 3%, and supporting the labor market.

• Some officials want to pause rate cuts indefinitely until disinflation 'firmly back on track,' while others see room for cuts if inflation cooperates; a few even suggested rate hikes could be appropriate if inflation stays elevated
• Two new voting members, Lorie Logan (Dallas) and Beth Hammack (Cleveland), publicly favor holding rates indefinitely due to continuing inflation concerns, while Governors Waller and Miran voted against the hold, preferring another quarter-point cut
• Markets expect the next rate cut in June with another in September or October; inflation remains stuck around 3% on the Fed's preferred PCE measure, above the 2% target, though core CPI recently hit its lowest level in nearly five years

The Nasdaq-100 rallied on February 18, 2026, but analysts warn it needs to establish a solid support base at its 200-day moving average (24,379) rather than attempting a V-shaped recovery to new highs above 26,670. Investor sentiment has shifted from momentum buying to demanding profitability, following a sharp selloff that sliced through the 50-day MA in under a month after topping at 26,349 on Fed announcement day.

• The index dropped rapidly from its January 2026 peak of 26,349 (just shy of the record 26,670), falling through its 50-day moving average and nearly touching its 200-day MA at 24,379.78 within a month
• Investor mentality shifted from 'loading the boat' speculation to a 'show me the money' approach, demanding concrete profit evidence rather than growth promises, particularly affecting overpriced tech and software stocks
• Analysts recommend building a sideways consolidation base at current levels rather than rushing toward new highs, as attempting to recover from lower-lows without establishing support invites short-seller pressure

The stock market is experiencing sharp sector-specific selloffs driven by an 'AI Scare Trade,' where any indication that AI could disrupt a business model triggers significant price drops. Credit rating agencies S&P and Moody's fell 25% and 20% respectively, while wealth services, trucking, and other sectors saw similar declines on AI disruption fears. Despite this volatility, major indices remain only 2-3% below all-time highs, though market fragility and slowing margin leverage growth suggest caution is warranted.

• Oracle's credit default swaps surged from 40 basis points in September to 160 basis points currently, reflecting investor concerns about whether hyperscalers can generate adequate ROI on massive AI infrastructure spending
• Market divergence has reached levels typically seen during selloffs, with performance dispersion among index members at extreme levels even as the S&P 500 is down just 2.5% from its January all-time high
• Leverage data shows the six-month growth in margin account debit balances has slowed after a surge in late 2025, historically a signal that precedes market reversals

A packed week of U.S. economic data releases looms, headlined by FOMC Minutes, Q4 GDP growth estimates (expected at 3.0% versus Q3's 4.4%), PCE inflation data, Flash PMIs, and University of Michigan consumer sentiment. These reports could significantly reshape growth and inflation narratives as markets weigh policy expectations amid sector rotation and international stock outperformance.

• Q4 GDP expected to show material deceleration to 3.0% annualized growth from Q3's 4.4%, though trade distortions may complicate headline readings
• Q4 PCE inflation data anticipated to show potentially warm year-end print, providing clearest inflation view before January data; economists expect gradual easing once tariff effects are lapped
• Bond market signals sluggish growth concerns as 2-year Treasury yields hit cycle lows, while international stocks post best performance relative to S&P 500 since at least 1995

White House economic advisor Kevin Hassett sharply criticized a New York Federal Reserve paper that found U.S. companies and consumers bear approximately 90% of tariff costs, calling it 'the worst paper I've ever seen' and suggesting its authors should be disciplined. The clash highlights tensions between the administration's tariff policy defense and Federal Reserve research findings on their economic impact.

• The New York Fed paper, published February 12, concluded that 90% of tariff burdens are being passed on domestically rather than absorbed by foreign exporters through lower prices
• Hassett countered that the research ignored wage and benefit increases from reshoring production, claiming real wages rose $1,400 on average and consumers benefited from tariffs
• January CPI rose 2.4% year-over-year while import prices were flat in December compared to a year earlier, according to Bureau of Labor Statistics data

Contact lens manufacturers are expected to achieve 4-6% annual market growth in 2026 after a post-pandemic slowdown, driven primarily by consumer shifts toward premium daily disposable lenses and rising global myopia rates. The industry's big four players—Johnson & Johnson, Alcon, Cooper Companies, and Bausch + Lomb—stand to benefit from higher margins on single-use products priced 30-50% above reusable lenses.

• Daily disposables command 30-50% price premiums over reusable lenses while generating recurring revenue through more frequent repurchasing
• Global myopia cases are projected to surge from 2.6 billion in 2020 to 3.36 billion by 2030, creating steady demand for vision correction products
• J&J's contact lens division grew 5.3% to $417 million in Q4, driven by premium silicone hydrogel and daily disposable lines

Wall Street futures pointed higher on Wednesday morning, with the Nasdaq 100 expected to lead gains up 0.45%, followed by the S&P 500 (+0.3%) and Dow Jones (+0.1%). The moves reflect ongoing sector rotation rather than broad market sentiment, with active traders harvesting profits from outperforming sectors like consumer staples, energy, and materials to offset weakness elsewhere.

• Only three sectors finished higher in the previous session (financials and real estate both +1%, industrials +0.5%), while eight sectors declined, indicating targeted rotation rather than panic selling
• Major tech stocks remain significantly below recent peaks: Amazon down 24%, Nvidia 14%, Meta 20%, and Palantir 40%, with a major tech index 10% off its highs
• Key US economic data due Wednesday includes durable goods, housing numbers, and Federal Reserve minutes, alongside earnings from chipmaker ADI and payments firm GPN

Americans are experiencing a 'boomcession' - a disconnect where strong economic indicators like GDP growth and stock market gains don't translate to improved financial well-being for average citizens. Despite solid macroeconomic data, most Americans report financial hardship, with credit card debt hitting record highs of $1.28 trillion and nearly 60% incorrectly believing the U.S. is in recession.

• Inflation affects lower-income Americans disproportionately, with grocery and shelter costs rising most between 2020-2025 and comprising a larger share of lower earners' budgets
• The labor market shows signs of a 'hiring recession' with December job openings at their lowest level despite stock market rallies, with layoffs surging 200% from December to January
• Economic gains are concentrated among the wealthy: the top 20% of Americans now drive total consumer spending more than ever, while 41% of those with credit scores below 670 report unstable finances

Ten S&P 500 companies generated over $23 billion each in adjusted net income during 2025, with tech giants Alphabet ($132.2B), Apple ($117.8B), and Microsoft ($114.8B) leading as the most profitable. Despite their massive earnings, investor concerns center on whether these companies can effectively monetize their substantial AI investments into future profit growth.

• Alphabet topped all S&P 500 firms with $132.2 billion in 2025 adjusted net income, surpassing Apple's $117.8 billion and Microsoft's $114.8 billion
• The S&P 500 is experiencing its fifth consecutive quarter of double-digit earnings growth, with a blended year-over-year growth rate of 13.2% for Q4 2025
• Not all top profit generators saw stock declines: Johnson & Johnson shares rose nearly 18% in 2026 with $26.2 billion in 2024 net income, while Exxon Mobil ranked seventh with $30.1 billion in earnings

UBS has raised its 2026 forecast for U.S. tech investment grade bond sales to $360 billion from $300 billion, driven by increased capital expenditure plans from major tech companies for AI infrastructure. The bank also cut its leveraged loan forecast to $360 billion from $450 billion, citing concerns that AI disruption risks are underpriced in that market.

• UBS now expects aggregate capex spending by 'hyperscalers' to approach $770 billion for 2026, approximately 23% higher than previous forecasts, with public debt issuance potentially reaching $240 billion
• Tech bonds are projected to account for one-fifth of total U.S. investment grade issuance, which UBS raised to $1.8 trillion from $1.725 trillion
• Companies are increasingly tapping non-dollar markets for funding, exemplified by Alphabet's recent $31.51 billion global bond raise including Swiss franc and sterling denominations

U.S. Treasury yields rose slightly on Wednesday as investors awaited the Federal Reserve's meeting minutes from its January meeting and upcoming inflation data. The 10-year yield increased over 2 basis points to 4.075%, while the 30-year bond yield rose 1 basis point to 4.7%. Markets are focused on insights into the Fed's decision to hold rates steady at 3.5%-3.75% for the first time since September 2025.

• The FOMC meeting minutes, scheduled for release at 2 p.m. ET, will provide insight into policymakers' decision-making and the discourse between hawks and doves regarding the pause in rate normalization
• The Fed held its benchmark rate at 3.5%-3.75% in January, marking the first pause since restarting normalization in September 2025, with Fed Chair Powell emphasizing data-dependent decision-making
• Investors are also awaiting Friday's release of the personal consumption expenditure price index, the Fed's preferred inflation gauge, for further economic insights

Swiss dental implants maker Straumann reported full-year organic sales growth of 8.9%, beating analyst expectations with revenue of 2.6 billion Swiss francs ($3.4 billion). The company attributed its strong performance to robust results in EMEA (Europe, Middle East, and Africa) markets.

• Revenue reached 2.6 billion Swiss francs, exceeding analyst consensus estimates of 2.59 billion francs
• Organic sales grew 8.9%, slightly above market expectations
• Strong performance was driven by EMEA markets, the company's key growth region

San Francisco Federal Reserve President Mary Daly stated the Fed must carefully analyze whether artificial intelligence is boosting productivity growth enough to allow faster economic expansion without inflation. While the Trump administration and some economists suggest AI investment could enable 1990s-style growth, Daly noted most macro-studies have found limited evidence of significant AI effects on productivity so far.

• Most macro-level studies currently show limited evidence of AI significantly impacting productivity growth, though individual companies may be seeing improvements
• Some economists compare potential AI impact to the 1990s computer and software adoption, which enabled faster growth without triggering inflation
• The Fed is evaluating whether AI-driven productivity gains could allow economic growth without requiring tighter monetary policy through rate increases