After hitting channel resistance, Gilead Sciences stock pulls back; the biotech leader’s Nasdaq chart deserves close attention
Gilead Sciences (GILD) is a biopharmaceutical company that makes treatments for HIV, hepatitis, and cancer. Over the past year, the stock has traded in an upward, parallel channel. It moved from the low $60s in early 2024 to near $150.
The channel has produced a pattern of higher lows and higher highs. The lower trendline has acted as support on multiple tests, while the upper trendline has acted as resistance.
In late January 2026, the stock surged and hit the upper boundary near $157–158. Since then, it has pulled back to $149.83.
The channel’s midline is projected near $136–140 and could act as support if the decline continues. Another key area to watch is $140–144.
The lower channel support line is now rising through the low $120s. A close below that area would signal a break below the channel.
The upper channel resistance remains near $160. If the channel stays intact and continues to rise in 2026, price targets would also move higher.
The pullback in Gilead Sciences from the upper channel area near $158 is not surprising after last month’s strong rally. That rally followed the late January earnings report for Q4 2025. The report showed Trodelvy sales beat expectations, rising 38% year over year. The stock is now working off those gains, which is often a healthy part of an ongoing uptrend.
If you expect the channel to hold, this dip may offer a chance to prepare for another move higher. One approach is buying April $155 calls to target a retest of the recent highs, especially if the stock stabilizes in the $140–144 zone. This trade works best if the rebound happens quickly.
A more conservative alternative is selling put spreads below the current price. This strategy benefits if the stock stays above a chosen level. Selling a March or April $140/$135 put spread fits with the channel’s midline support area. It can also benefit from time decay, and implied volatility may still be elevated after last month’s earnings.
The strong rejection at the channel top also shows sellers are active. If you expect a deeper drop toward the $136–140 midline, you could consider buying March $145 puts. This offers defined risk if the pullback accelerates.
Another way to trade the overhead resistance is selling a bear call spread, such as the March $155/$160. This position assumes GILD will not make a new high in the near term. It can profit if the stock moves sideways or down, using the resistance above as a cushion. A similar consolidation happened in Q3 2025 before the next leg higher began.
Cadence Design Systems fell 5.5% from Friday’s close, but remained in a bullish channel despite a rough session
Cadence Design Systems (CDNS) fell about 5.5% in the last session and has trended lower since August. The share price is now more than 25% below its prior highs.
On the daily chart, CDNS has been trading inside a downward-sloping parallel channel. This points to a steady decline, with price moving between two falling trendlines.
The key level to watch is the channel’s upper boundary. A clean break above that line would suggest momentum is turning.
There are two ways to trade this setup:
– Enter only after a confirmed break above the trendline.
– Wait for a break, then buy a pullback to the former boundary (old resistance turning into support).
The recent drop fits within the same channel pattern, rather than signaling a brand-new move. The focus remains on how price reacts near the channel’s edges.
Risk management matters here. That means setting levels ahead of time, keeping position size reasonable, and having a plan if the trade fails.
We are reviewing how Cadence Design Systems has moved since the corrective phase we noted in 2025. From August through year-end, the stock drifted lower inside a downward-sloping channel. That controlled pullback helped set up the move that followed.
The breakout we wanted to see has now happened. In late January, the stock pushed decisively above the channel’s upper boundary. The catalyst was strong fourth-quarter earnings that beat expectations, helped by demand for its AI-focused chip design software. Since then, the stock has climbed more than 15%, supporting the momentum shift.
For options traders, this creates ways to position for more upside in the weeks ahead. Buying call options—such as April $280 calls—can capture further strength with clearly defined risk. With the stock near $265, these calls gain value if the uptrend continues toward the prior 2025 highs.
If you expect a short pause or a modest pullback, selling cash-secured puts is another approach. Selling March $250 puts lets you collect premium while targeting a possible entry near a support area. This matches the idea of buying on a retrace to prior resistance.
Risk should stay tied to the key technical levels. The 2025 channel breakout area, near $230, is now major support. A drop back below that zone would weaken the bullish case and would be a reason to reassess open positions.
NBC’s Jocelyn Paquet says voided tariffs briefly lowered rates, but a universal 15% duty renewed pressure on the USD
The US Supreme Court struck down tariffs set under the International Emergency Economic Powers Act (IEEPA). That decision would have lowered the average tariff on imported goods from 13.6% to 6.4%. It would have reduced costs for firms and could have eased pressure on goods prices.
The ruling also pointed to a drop in federal customs duty revenue, from about $335 billion per year to $155 billion per year. With less tariff income, worries increased about the US fiscal outlook, including net interest costs and bond market confidence.
Tariff Reset And Revenue Tradeoffs
In response, the Trump administration imposed a universal 15% tariff under Section 122 of the Trade Act of 1974. This pushed the effective tariff rate up to 12.0% and lifted tariff revenue to about $290 billion per year. Any remaining revenue shortfall may be filled with a new round of sector-specific tariffs. This episode highlights a clear trade-off: lower tariffs can support growth and inflation conditions, but they also reduce government revenue. The market has seen sharp tariff swings—from last week’s Supreme Court decision to the administration’s quick move to reimpose new duties. This has created significant policy uncertainty. That uncertainty is showing up in the CBOE Volatility Index (VIX), which has risen above 20. Traders appear to be preparing for larger price moves in the weeks ahead. In this kind of market, strategies that focus on volatility—rather than picking a direction—may work better. For equity-derivatives traders, this often means using options on broad index products like the S&P 500. The push and pull between lower import costs and fiscal concerns can drive unpredictable day-to-day moves, which makes outright long or short positions riskier. Buying straddles or strangles may be a reasonable way to trade the higher volatility, similar to what markets saw during the 2018–2019 trade disputes.Fiscal Stress And Rates Positioning
The administration’s push to protect customs revenue ties directly to bond market concerns about US fiscal stability. The Congressional Budget Office reported late last year that the federal debt-to-GDP ratio for 2025 was above 110%, and net interest costs are approaching $1 trillion per year. In that setting, the government has little room for revenue gaps. This could keep the Treasury market on edge and may lead some traders to position for higher long-term yields, including through 10-year note futures. The US dollar outlook is also mixed. It is supported by its safe-haven role, but weighed down by concerns about the fiscal path. Rapid policy changes also make it harder to hold directional currency trades in pairs like EUR/USD or USD/JPY. As a result, using currency options to hedge—or to trade higher exchange-rate volatility—may be a more cautious approach in the coming weeks. Create your live VT Markets account and start trading now.December’s US S&P/Case-Shiller annual house prices rose 1.4%, below the 1.5% forecast
The United States S&P/Case-Shiller Home Price Index rose 1.4% year-on-year in December.
This was below the forecast of 1.5%.
Housing Market Signals Cooling
December’s home price data, with only a 1.4% year-on-year gain, confirms the slowdown many expected. Missing the forecast suggests the economy is still cooling as the new year begins. Traders should treat this as part of a broader trend that may point to ongoing economic weakness, not as a one-off result. This softer housing report also supports the case for the Federal Reserve to consider rate cuts sooner. The latest January 2026 CPI reading shows inflation easing to 2.7%, which increases pressure on the Fed to respond. With that in mind, traders may look at interest rate futures positions that could benefit if a rate cut arrives in the second or third quarter of this year. Options on homebuilder ETFs, such as XHB, are also worth watching. With price growth slowing and mortgage rates still above 6%, demand may remain weak. A similar setup appeared in late 2023 ahead of a market dip, so buying puts on these sector funds could work as a practical hedge. Housing weakness can also weigh on the wider economy. The January jobs report showed job growth slowing to 160,000, which adds to that concern. This may pressure the S&P 500, making bearish trades like SPY puts or short ES futures more appealing. If volatility rises, traders may also consider long positions in VIX call options.Rate Hike Lag Effects
Historically, the full impact of aggressive Federal Reserve rate hikes can take more than two years to show up in housing. The hiking cycle ended in 2024, and today’s slowdown may reflect those delayed effects. In other words, the market may now be reacting to the long stretch of higher borrowing costs seen through 2025. Create your live VT Markets account and start trading now.US housing price index rose 0.1% month on month in December, below the 0.3% forecast
The United States Housing Price Index rose by 0.1% month-on-month in December. The forecast was 0.3%.
The result was 0.2 percentage points below the forecast. This points to slower monthly growth than expected.
Implications For Fed Policy
A softer Housing Price Index in December 2025 suggests the Federal Reserve’s rate hikes over the past year are starting to weigh on the housing sector. This weaker-than-expected reading points to a cooling economy. As a result, we may need to adjust our rate outlook. It also increases pressure on the Fed to pause its tightening cycle sooner than previously expected. Because housing is slowing, we are reviewing the timing of possible rate cuts in 2026. Even though the January 2026 inflation report showed CPI still high at 3.1%, this housing data makes the Fed’s job harder. We should consider derivatives that benefit from lower interest rates, since markets may begin to price a higher chance of a rate cut by the third quarter of this year. This release is a bearish signal for housing-related equities and their derivatives. We expect near-term weakness in homebuilder stocks and Real Estate Investment Trusts (REITs). A similar pattern appeared in the 2022 downturn, when the S&P Homebuilders ETF (XHB) fell sharply after mortgage rates moved above 6%. The labor market remains firm, with early February 2026 jobless claims holding near 215,000. However, housing often leads the broader economy. When housing is weak but jobs are strong, uncertainty can rise, and markets can become more volatile. Because of this, we see value in adding positions that would gain if the VIX rises, as a hedge against a wider slowdown.Volatility Hedge Considerations
Create your live VT Markets account and start trading now.The US Redbook Index’s annual reading eased to 6.7% on February 20, down from 7.2%
The United States Redbook Index year-on-year reading fell to 6.7% on 20 February. The previous reading was 7.2%.
At this point in 2025, the drop to 6.7% was an early warning sign. It showed that the strong consumer spending we had been tracking was starting to slow. This mattered because it hinted that the broader economy could cool next.
Redbook As An Early Signal
The slowdown we saw in February 2025 came before weaker official retail sales reports in the second quarter. We also remember that this trend helped shape the Federal Reserve’s decision to pause rate hikes later in 2025. This is a good example of how weekly data can signal bigger moves ahead. Now, as we review the latest data from January 2026, a similar setup may be forming. Official retail sales just posted an unexpected 0.8% month-over-month decline. That is the biggest drop in almost a year. This supports the idea that consumers may be turning more cautious again. In this environment, it may make sense to consider buying put options on consumer discretionary ETFs, such as XLY. If consumer weakness continues, these positions could rise in value as retail-related stocks fall. This is a direct way to position for a spending slowdown. We should also watch interest rate derivatives, especially Secured Overnight Financing Rate (SOFR) futures. If the economy keeps cooling, markets may price in a higher chance of Federal Reserve rate cuts later this year. That would likely push SOFR futures higher.Positioning For Higher Volatility
With uncertainty rising, it may be wise to prepare for higher market volatility. Buying call options on the VIX index can act as a hedge against a market drop. Negative economic surprises often cause volatility to jump, which can make these options much more valuable. Create your live VT Markets account and start trading now.Chicago Fed President Austan Goolsbee expects more rate cuts this year once inflation clearly moves back toward 2%
Chicago Fed President Austan Goolsbee said he expects more interest rate cuts this year, but only after inflation is clearly moving back toward the 2% target. He spoke Tuesday in Washington, D.C., ahead of an event hosted by the National Association for Business Economics.
He said recent inflation progress has stalled and that inflation still needs to improve. He also said it is unclear whether current Federal Reserve policy is even restrictive.
Inflation Progress Must Resume
Goolsbee said core services inflation excluding housing is still high, and that policymakers should stay alert. He warned that cutting rates based on hoped-for productivity gains could overheat the economy. He said productivity gains should not be counted on to bring inflation down, and should not be used as a reason to cut rates. He added that he is concerned if inflation remains above target. He said consumer spending has been the main driver of economic growth, not AI-related investment. He added that economic growth and the labour market do not look especially fragile. He said low hiring and low firing are being driven by uncertainty, which he linked to a Supreme Court tariff ruling. He also said that any return to a scarce reserves regime would require weighing the pros and cons.Market Implications For Rates
The message is clear: rate cuts are not likely as soon as many had hoped. The latest Consumer Price Index report for January 2026 showed core inflation at 3.8%, still far from the 2% target. That makes “higher for longer” the most likely rate outlook in the coming months. For interest-rate derivatives traders, this points to positioning against near-term easing. Markets have repriced Fed Funds futures quickly. They now suggest less than a 50% chance of a rate cut before the July meeting. That is a big change from a month ago, when a second-quarter cut looked almost certain. The economy still does not look fragile, so betting on a steep downturn looks risky. January’s jobs report showed a solid gain of 215,000 jobs. Recent retail sales also beat expectations, showing that consumer spending is still powering growth. This strength could support equities, but high rates will likely limit the size of any rally. The main concern is still sticky core services inflation, excluding housing—the area where the inflation fight is hardest. This measure has barely moved from where it sat through much of 2025. Until it shows real improvement, the Federal Reserve is likely to stay cautious and slow to act. With inflation stalled and the Fed cautious, equity volatility may rise. For options traders, strategies that benefit from sideways markets or add downside protection—such as selling out-of-the-money call spreads or buying puts on major indices—may look appealing. The VIX, near 16, may be underpricing the risk of a sharp move after the next major data release. Create your live VT Markets account and start trading now.Politics and Bank of England rate-cut expectations unsettle sterling, nudging GBP/USD towards 1.3480 in Europe
GBP/USD slipped to around 1.3480 in European trading, and price action stayed choppy. The pair is under pressure because the Pound is trading unevenly. Markets are also pricing in a higher chance that the Bank of England may deliver several interest rate cuts soon.
From a technical angle, the risk is for more downside if GBP/USD breaks below 1.3430. That keeps the near-term outlook cautious.
Uk Data And Boe Outlook
In the UK, inflation remains sticky and growth data has been firmer. However, labour market figures have weakened. This mix has slowed any big shift toward more dovish Bank of England expectations, and it has helped support the Pound at times. Volatility is likely to stay high ahead of the 26 February by-election. After that, EUR/GBP could drift lower if political worries fade and the economic data stays resilient. The Pound is finding it hard to pick a clear direction near 1.3500 against the dollar. January inflation stayed high at 3.1%, while the latest GDP data for the end of 2025 showed zero growth. These signals conflict, which leaves the Bank of England in a tough spot when deciding what to do with rates this year. We saw similar choppy trading in early 2025, when by-election uncertainty weighed on sentiment. Now, the market is cautious again as the new government’s first major budget approaches in March. This political risk is keeping many investors on the sidelines.Volatility Focus And Trading Range
With so much uncertainty, it is risky to bet on a clear uptrend or downtrend. Instead, traders may look at strategies that benefit from bigger price swings, such as buying options straddles. Implied volatility in GBP/USD options has risen to an 8-week high, which suggests the market is preparing for a large move once budget details are known. Key levels to watch are 1.3400 and 1.3650. A clear break outside this range could lead to a much larger move, which is what volatility trades are set up for. In 2025, 1.3430 acted as an important pivot during periods of uncertainty. Create your live VT Markets account and start trading now.BNP Paribas expects emerging markets to benefit in 2026 from global AI infrastructure investment and supply chains
BNP Paribas expects emerging markets to remain supported in 2026. The bank says this is due to strong global spending on artificial intelligence (AI) infrastructure and related supply chains. It forecasts average emerging market growth of 4.1%, down from 4.3%.
The bank says the main support today comes from demand created by building data centres and other physical AI infrastructure. It expects the benefits to flow mostly through trade, not through near-term productivity gains.
It also notes that emerging economies are less prepared than advanced economies to benefit from AI adoption and broad diffusion. The report cites an average AIPI index of 0.72 for G7 countries.
The report says some emerging markets are better positioned within AI supply chains. It highlights producers of critical metals, electricity, and advanced semiconductors. It adds that this advantage could strengthen in the near term if AI infrastructure investment continues.
We view the ongoing build-out of AI infrastructure as the main support for emerging markets right now. This growth is coming from global demand for the physical inputs to AI, not from domestic productivity gains. As a result, countries that export electronics, energy, and key raw materials are in a strong position.
For traders, this points to potential long positions in the currencies of key supply-chain countries. Examples include the Chilean Peso (copper exposure) and the Taiwanese Dollar (semiconductor exposure). Another approach is call options on emerging market indices with heavy exposure to technology and materials. These trades aim to benefit from continued investment into AI hardware.
Recent data supports this view. South Korea’s chip exports for January 2026 rose 35% year over year, extending a trend seen through much of 2025. This demand is closely tied to the global construction and upgrading of data centres. It suggests the investment cycle that started two years ago has not yet peaked.
The same demand shows up in commodity markets. Copper prices have recently moved above $10,500 per tonne, reflecting strong need for wiring and power-grid upgrades linked to data centres. Derivative trades on copper futures offer a direct way to gain exposure to this infrastructure cycle.
The trend is also visible in energy markets, especially in Southeast Asian hubs such as Malaysia. Reports indicate energy use in key industrial zones—where several new data centres started operating in 2025—is up 12% from early last year. This points to opportunities in energy-related assets in countries attracting AI investment.
However, the growth rate may start to slow. With that in mind, traders can stay constructive while using defined-risk strategies, such as bull call spreads on relevant indices or stocks. This keeps upside exposure while limiting risk if the investment boom cools faster than expected.
AUD/USD slips toward 0.7040, down 0.20%, as traders await Australian CPI amid US tariff uncertainty
AUD/USD traded near 0.7040 on Tuesday, down 0.20%, after it failed to hold above 0.7100 on Monday. The pair pulled back from multi-month highs as traders cut risk ahead of key data from Australia, China, and the US.
Australia’s January CPI is due on Wednesday and is the main local event this week. Headline inflation is forecast at 3.7% year on year, down from 3.8%. Trimmed Mean inflation is expected to stay at 3.3%.
