The DJIA fell nearly 300 points (0.59%) to 49,351 on Thursday. The S&P 500 dropped 0.3%, and the Nasdaq Composite slipped 0.2%. The DJIA is still above its 50-day EMA near 48,944, but it remains below the early-month highs above 50,500. FOMC minutes from the January 27–28 meeting showed that “almost all” participants supported keeping rates at 3.50%–3.75%. Stephen Miran and Christopher Waller dissented and preferred a 25-basis-point cut. Initial Jobless Claims were 206K for the week ending 14 February, down 23K from the prior week and below the 225K consensus. Continuing claims rose to 1.869 million.

Key Data And Fed Path

CME FedWatch puts the odds of no rate change on 18 March at about 94%. The first cut that is fully priced in is not expected until mid-2026. On Friday, the BEA will release Q4 2025 GDP and December PCE at the same time. GDP is expected at 2.8%, down from 4.4% in Q3. Core PCE is seen near 3.05%. Markets will also watch the flash February PMI, after January manufacturing PMI came in at 52.4. Walmart reported adjusted EPS of $0.74 on $190.7 billion in revenue. US comparable sales rose 4.6% excluding fuel, and global e-commerce grew 24%. However, Walmart guided FY EPS to $2.75–$2.85 versus $2.96 expected and announced a $30 billion buyback. Blue Owl fell more than 8% after it limited OBDC II redemptions and sold $1.4 billion in loans at 99.7% of par. Blackstone fell about 6%, and Apollo dropped about 5%. WTI rose about 2% to above $66, and Brent reached $71.49. The Strait of Hormuz is tied to roughly 20% of global oil consumption. Spot gold climbed to about $5,012 after moving back above $5,000. Deere jumped more than 7% on net sales of $9.61 billion (+13% year-on-year), EPS of $2.42, and a higher net income outlook of $4.5–$5.0 billion (up from $4.0–$4.75 billion). With markets pulling back from recent highs, focus is now on Friday’s key releases: Q4 2025 GDP and the December PCE inflation report. A hotter inflation reading could support the hawkish tone in the January Fed minutes and could spark sharp volatility. We may want to buy downside protection, such as VIX call options or puts on major indices, to hedge against a fast sell-off.

Rates Markets And Positioning

The Fed’s “higher for longer” message, supported by the drop in jobless claims, has largely taken a March rate cut off the table. Futures now suggest the first cut may not come until mid-year, a big change from expectations a few months ago. This keeps us cautious on rate-sensitive growth stocks and may create opportunities to short Treasury futures if yields stay elevated. Rising tensions with Iran are adding a risk premium to energy markets and have pushed crude to its highest level in months. This increases inflation risk and also boosts demand for safe havens like gold, which has moved back above $5,000. We see this as a reason to keep or add to long oil positions and energy sector ETFs, while using gold as a hedge. Sector performance is also splitting in a way that creates clearer trade setups. Ongoing weakness in software names like Salesforce, tied to AI disruption concerns, may favor bearish put spreads. In contrast, Deere’s strong results and higher forecast suggest some cyclicals may be stabilizing, making call options on leading industrial stocks more attractive. The steep declines in alternative asset managers like Blue Owl and Blackstone highlight liquidity risk in private credit. Limits on redemptions have unsettled investors and recall the 2023 regional bank stress, when liquidity fears spread quickly. For now, we are staying away from this sector and watching closely for any broader spillover into the financial system. Create your live VT Markets account and start trading now.

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