ETO Markets Buzz | Growth Slows as Tariff Ruling Shakes Policy Outlook and Precious Metals Surge

Global Market Outlook | February 2026

Global markets navigated a complex mix of slowing growth, elevated inflation, and renewed geopolitical tension this week. In the United States, a weaker than expected fourth quarter GDP print reinforced concerns that economic momentum is fading. At the same time, a major legal ruling on trade policy added fresh uncertainty to the political backdrop, while commodities rallied sharply on inflation persistence and geopolitical risk.

Equities remain rangebound near recent highs, but underlying macro signals suggest the expansion is losing pace. Precious metals and energy markets, by contrast, continue to reflect heightened demand for inflation hedges and geopolitical protection.

US Growth Momentum Softens

US fourth quarter GDP came in at 1.4 percent, well below expectations and marking a clear deceleration from prior quarters. The weaker print suggests that tighter financial conditions and policy uncertainty are beginning to weigh more visibly on activity.

Business surveys echoed this moderation. The S and P Global US Composite PMI declined to 52.3 in February from 53.0 in January, signalling continued expansion but at the slowest pace in several months. Both manufacturing and services activity softened, and export demand weakened meaningfully.

Employment growth has also moderated, with firms increasingly focused on cost control and productivity rather than aggressive hiring. While the economy remains in expansion territory, the loss of momentum is becoming more evident across leading indicators.

Supreme Court Ruling Reshapes Trade Landscape

The Supreme Court of the United States delivered a significant ruling against the use of sweeping global tariffs under emergency powers legislation. The decision represents a notable constraint on executive trade authority and introduces fresh complexity into the administrations economic agenda.

In response, former President Donald Trump signalled alternative mechanisms to pursue tariff policies, suggesting that trade uncertainty is unlikely to disappear entirely.

The potential removal or scaling back of broad tariffs could lower input costs, ease inflation pressures, and improve business sentiment. However, ongoing policy volatility and the possibility of alternative trade measures continue to cloud the outlook.

Inflation Persistence Supports Precious Metals

Core PCE inflation remains sticky at 3 percent, reinforcing the view that price pressures are not fully resolved. This persistence has continued to support bullion markets, with gold and silver attracting strong demand as inflation hedges.

Silver surged more than five percent during the week, while gold remained firmly supported by the convergence of slowing growth, elevated inflation expectations, and geopolitical risk.

Persistent inflation alongside decelerating growth creates a challenging policy environment for the Federal Reserve, limiting flexibility and sustaining demand for defensive assets.

Geopolitical Tensions Lift Energy Markets

Energy markets strengthened as geopolitical tensions intensified in the Middle East, including a significant US military deployment near Iran.

Oil prices traded near a six month high and recorded strong weekly gains. Even in the absence of immediate supply disruption, heightened geopolitical risk adds a risk premium to crude markets.

The combination of supply sensitivity and political volatility continues to underpin energy prices, reinforcing broader inflation dynamics.

Australia and Asia Reflect Slower Activity

In Australia, business activity indicators came in weaker than expected across manufacturing, services, and composite readings. The softer data raise questions about domestic momentum and valuation sustainability in local equity markets.

Across Asia, attention remains focused on policy responses and inflation developments. Diverging growth trajectories and policy stances continue to create regional volatility in currency and equity markets.

Outlook for Markets

In this environment, ETO Markets continues to emphasise disciplined positioning, awareness of policy driven volatility, and a diversified approach across asset classes. As growth momentum moderates and inflation persistence lingers, markets are likely to remain sensitive to both macro data and geopolitical developments.