Wall Street Insights Breakfast FM-Radio | February 21, 2026

Good Morning from Huajian

Please upgrade to the latest version of the Jianwen app to successfully listen to the following audio.

Market Overview

U.S. Q4 GDP underperformed expectations, December core PCE inflation higher than anticipated, leading to a lower open in U.S. stocks. Subsequently, the Supreme Court ruled that Trump’s tariffs were illegal, causing stocks to rally intraday. After significant volatility throughout the day, major indices closed higher.

The S&P 500 rose 0.7%. The Nasdaq led the gains, with Google up over 4%, but Oracle fell more than 5%, Coreweave dropped over 8%. Anthropic released Claude security tools, causing a sharp decline in cybersecurity stocks. The “Trump Tariff Loser Index” closed up more than 1.3%.

Tariff revenue expectations fell short, U.S. Treasury yields rose, and the dollar weakened. The 10-year Treasury yield increased by 1.5 basis points to 4.0826%, up 3.43 basis points for the week. The 2-year yield rose 2.07 basis points to 3.4781%, up 7.04 basis points this week. The dollar dipped slightly by 0.06%, but has gained nearly 1% this week. Digital currencies rebounded significantly from Friday’s early lows.

Tensions in Iran, combined with sticky inflation, pushed gold up over 2%, back to $5,100. Spot silver surged 8%. Oil prices briefly hit six-month highs before retreating, closing slightly lower.

During Asian hours, on the first trading day of the Year of the Horse, Hong Kong stocks saw the Hang Seng Tech Index fall over 2%, while large models and storage stocks surged against the trend, with Zhipu up nearly 43%, and robotics concepts exploded.

News Highlights

The global Trump tariffs have been overturned; the Supreme Court ruled they were illegal, with over $175 billion in taxes facing refunds. The Court ruled that the International Emergency Economic Powers Act (IEEPA) does not grant the president authority to impose tariffs without Congress approval. The ruling affects reciprocal tariffs; tariffs on steel, aluminum, and automobiles remain unaffected. Trump called the ruling “shameful” and has considered alternative measures to mitigate impacts. The ruling did not specify whether tariffs should be refunded. Economists estimate that over $175 billion in tariffs have been collected; full refunds or halving the tariffs could significantly impact revenue. Following the ruling, U.S. stocks hit new highs for the day, the dollar and Treasuries hit lows, and gold and silver prices widened gains.

After the Supreme Court ruling, Trump used alternative tools to impose a 10% global tariff, claiming tariffs will be “much higher” than before, implying that illegal tariffs will not be refunded. Trump stated that the legal basis he used will be “more powerful” than the overturned IEEPA, and that under Section 122 of the Trade Act of 1974, a 10% global tariff will be implemented, expected to take effect in about three days. All tariffs under Section 301 and Section 232, based on the same legal framework, remain in effect; no congressional approval is needed. If more authority is required, it is believed it will be granted. Trump becomes the first U.S. president to impose tariffs under Section 122.

Trump hinted that illegal tariffs will not be refunded; the Treasury Secretary said tariff revenue this year will be “roughly unchanged.” The Supreme Court’s decision leaves refund issues to lower courts. Trump criticized the ruling, noting it did not specify whether previous tariff revenues would be retained, and that legal battles could last two to five years. Bensent noted that combining Section 122 with potentially strengthened Section 301 and Section 232 could keep tariff revenue nearly unchanged this year; government revenue from tariffs is closer to $1.3 trillion rather than the $1.75 trillion suggested by some models; tariffs will return to previous levels but with more complex procedures.

The Supreme Court’s ruling does not “destroy” tariffs; Trump still has multiple tools available. Compared to the IEEPA, which was overturned, tools like the national security Section 232 of the 1962 Trade Expansion Act and the controversial Section 338 of the 1930s Great Depression era have more restrictions.

Don’t celebrate too early the overturning of Trump tariffs by the U.S. Supreme Court. Wall Street expects market reactions to be short-lived. The relatively mild volatility in stocks, bonds, and currencies is partly because markets had already anticipated this outcome, and Trump indicated he has backup plans. Compared to the tariff ruling, recent concerns over AI, software stock sell-offs, and Middle East tensions may attract more investor attention. Although Trump has at least five alternative legal tools to reimpose tariffs, any approach will likely exert upward pressure on long-term U.S. Treasury yields.

Trump confirmed considering a “limited military strike” on Iran; Iran’s foreign minister said they will decide on a draft agreement with the U.S. within three days. According to CCTV, Trump said he is contemplating a “preliminary limited military strike” to pressure Iran to accept U.S. demands on the nuclear deal. Iran’s foreign minister stated that Iran’s peaceful nuclear program has no military solution, and the only way forward is diplomacy, with an agreement to be finalized within three days. An Israeli military spokesperson said the IDF is on high alert. Oil prices fluctuated little through Friday’s close compared to Thursday.

U.S. Q4 GDP grew only 1.4%, with a one-percentage-point drag from the government shutdown. The U.S. real GDP for Q4 2025 was at an annualized quarterly rate of 1.4%, well below the expected 2.8% and down sharply from 4.4% in the previous quarter. The shutdown reduced GDP by about 1 percentage point, with federal spending declining at an annualized rate of 16.6%. Despite a 2.2% growth for the full year, slowing consumption and exports, labor market concerns, and stubborn inflation have complicated the outlook. Before the data release, Trump preemptively criticized the shutdown and called for rate cuts, drawing market attention.

The Fed’s preferred inflation indicator exceeded expectations! December core PCE inflation rose 3% year-over-year. The core PCE price index increased 0.4% in December, the largest monthly gain in nearly a year; YoY, it rose 3%, with a target of 2.8% for early 2025.

U.S. February PMI for manufacturing and services fell short of expectations, hitting multi-month lows. The February manufacturing PMI preliminary reading was 51.2, down from 52.4 in January, the lowest in seven months. The services PMI was 52.3, down from 52.7, the lowest in ten months. The composite PMI was 52.3, down from 53 in January, the lowest since April 2025, underperforming the UK and Japan.

Eurozone manufacturing PMI hit a 3.5-year high, led by Germany’s rebound; France remains below the expansion threshold. Eurozone economic activity accelerated, but for the second consecutive month, Eurozone firms cut jobs; Germany’s employment declined, France remained flat, and employment in other regions rose. HCOB chief analyst noted that with stable economic expansion and high service sector inflation, the ECB is likely to keep key policy rates unchanged.

Japanese Prime Minister’s policy speech: breaking “excessive fiscal austerity,” suspending food consumption tax, increasing investments in AI and other industries. Prime Minister Fumio Kishida emphasized “proactive fiscal policy” to break austerity, reaffirmed a two-year suspension of the food consumption tax, and plans to increase investments in AI and chip industries through multi-year budgets. He also pledged to control debt growth while boosting the economy, setting specific indicators for fiscal reform progress to keep debt growth within the economic growth rate.

• Will Japan’s overseas capital “massively flow back”? Despite a large net buy of Japanese bonds in January, Goldman Sachs warns against misjudging a “return flow.” Domestic retail demand for overseas stocks remains strong, but institutional investors are hindered by the still-large US-Japan interest rate differential, with only weak signs of capital returning. Goldman notes that if macro risk appetite remains stable, interest rate differentials stay steady, and Japan’s fiscal expansion continues, the yen’s depreciation pressure will persist.

Google’s “AI Dream Team” responds to bubble doubts: this is an industrial revolution, but 10 times faster and 10 times larger in scale. At the India AI summit, Google CEO revealed that Google Cloud’s backlog has doubled to $240 billion, demonstrating the rationale for high capital expenditure. DeepMind CEO predicts general AI will still take 5-10 years. Google executives agree that AI will fundamentally change workflows for SMEs and scientific research, with India shifting from a simple market to a “full-stack builder” in AI.

Anthropic released Claude security tools, causing a plunge in cybersecurity stocks. The new tool scans code repositories for security vulnerabilities and offers targeted patches for manual review. Currently in limited research preview, the news triggered a sell-off in cybersecurity ETFs, with Global X Cybersecurity ETF down 4.9%, hitting its lowest since November 2023. Cybersecurity stocks SailPoint fell 9.4%, Okta down 9.18%, and Cloudflare dropped 8%.

Selected Research Reports

Understanding the global markets since 2026: what’s rising? Why aren’t U.S. stocks performing? Will this trend continue? A Goldman Sachs report reveals new market directions for 2026: cyclicals still have room to rise; but valuations of hot topics like AI are overextended, high volatility may become the norm; the dollar will remain weak; caution is advised on overvalued sectors, diversify holdings, maintain healthy non-U.S. exposure (including emerging markets), and consider long-term volatility positions.

LPDDR6 era arrives! Driven by surging AI demand, next-generation DRAM will enter the market faster than expected. LPDDR6 offers 1.5 times the performance of its predecessor, with commercial rollout expected in the second half of the year. Major players like Nvidia, Samsung, and Qualcomm are actively preparing. Most HPC semiconductor design firms are considering parallel integration of LPDDR5X and LPDDR6 IP, especially in chips with 4nm or smaller process nodes, with demand exceeding expectations.

Domestic Companies

Hong Kong tech stocks diverge: “AI new stars” favored, “profitability concerns” drag on internet giants. On the first day of trading, capital rotated heavily! AI newcomers Zhipu, MiniMax surged, while giants like Alibaba and Tencent saw outflows. Domestic AI firms accelerated model updates; holiday and Spring Festival Gala performances amplified market focus on AI, leading to concentrated capital inflows into pure AI stocks. Despite strong data from major firms during the holiday, with Qianwen and Yuanbao’s active users rising, large subsidies and competitive pressures raise concerns about sustainability of costs and profits.

Overseas Macro

U.S. Treasury yields to revise proposals on taxing sovereign wealth funds, after warnings from private equity. The U.S. Treasury is making concessions on a comprehensive reform proposal targeting taxation of sovereign wealth funds and public pension funds. The proposal, previously introduced by the IRS, aimed to update Section 892 of the tax code, classifying most U.S. debt holdings of these funds as commercial activities, risking taxation. Private credit and private equity firms warned that such reforms could negatively impact foreign investment in U.S. markets.

Overseas Companies

Dalio’s family office heavily invests in gold, fully exits Bridgewater, and discloses $500 million U.S. stock holdings for the first time. Since the pandemic, Dalio’s family office has disclosed its U.S. stock holdings, totaling about $503 million at the end of last year, a one-third increase from early 2021. Over 75% of the funds are in gold ETFs, with the rest in U.S. Treasuries and S&P 500 assets. Analysts suggest this indicates Dalio’s shift focus from Bridgewater to family office investments.

Google releases Gemini 3.1 Pro, doubling core reasoning performance. The major upgrade of Google’s foundational large model! Gemini 3.1 Pro launched, with reasoning performance doubled, scoring 77.1% in logic benchmarks, and code capabilities approaching Opus 4.6. The new model emphasizes multi-source data integration and complex task decomposition, with preview versions available immediately, accelerating Google AI’s ecosystem.

OpenAI developing AI speakers, glasses, and smart lamps, with earliest release in 2027. Reports indicate OpenAI is assembling a team of over 200 to develop AI hardware products, including smart speakers, glasses, and desk lamps. The first product will be a camera-equipped smart speaker priced between $200 and $300, with delivery expected as early as 2027, supporting environmental and facial recognition payment functions. Smart glasses are expected to be mass-produced by 2028.

“Curve Investment” SpaceX IPO, Korean broker Future Asset’s stock soars 200% this year! Future Asset’s stock has more than doubled this year, as investors see it as a “shadow stock” betting on SpaceX’s IPO (valuation $1.25 trillion)—the company has invested over $400 million in SpaceX and xAI. Despite strong fundamentals, its valuation has tripled the five-year average, raising risks of a correction.

Risk Warning and Disclaimer

Market risks are inherent; investment should be cautious. This article does not constitute personal investment advice and does not consider individual user’s specific investment goals, financial situation, or needs. Users should evaluate whether any opinions, views, or conclusions herein are suitable for their circumstances. Investment is at your own risk.