Inflation Reaccelerates, Oil Surges, and Credit Anxiety Ripples Across Markets

Market Overview

U.S. equities were hit by a wave of negative catalysts last Friday. January PPI came in well above expectations, reinforcing concerns that inflation remains sticky. At the same time, UK-based private credit heavyweight MFS collapsed after a “double pledge” fraud scandal, reigniting fears of systemic stress in credit markets. Bank stocks led the selloff, with the banking index plunging nearly 5% and Jefferies dropping more than 9%.

The technology sector was not spared. Block announced a 40% workforce reduction, fueling fresh debate over AI-driven labor displacement. Nvidia extended post-earnings losses, falling more than 9% over two sessions. CoreWeave tumbled 18% after reporting a wider-than-expected loss. Although Dell rallied more than 22% on strong earnings, the Nasdaq remained under heavy pressure.

On the macro front, safe-haven flows flooded into Treasuries, pushing the 10-year yield below the key 4.0% threshold. The U.S. dollar strengthened in the near term. The offshore renminbi weakened back toward 6.87 after policy guidance from the Peoples Bank of China, though it still posted nearly a 1,000-point gain for February. Cryptocurrencies remained under pressure, with Bitcoin down more than 20% for the month.

Commodities delivered standout performance:

Gold and Silver

Safe-haven demand drove gold up more than 10% in February, marking its strongest monthly gain in 14 years. Silver surged 8% in a single session on Friday.

Crude Oil

Comments from former President Trump regarding potential military action against Iran reignited geopolitical risk premiums. Crude oil spiked 4% intraday, closing at a seven-month high and posting its first monthly gain in six months.

Hot Topics Ahead

• U.S. Not Considering Strategic Petroleum Reserve Release

The U.S. Department of Energy stated that the government has “not discussed at all” tapping the Strategic Petroleum Reserve (SPR) in response to rising oil prices. The remark suggests Washington views the current geopolitical shock as manageable. Meanwhile, two OPEC+ delegates revealed that the group will meet Sunday to discuss significantly accelerating output increases, potentially approving production hikes three to four times larger than previously planned.

• January Core PPI Posts Fastest Annual Growth in Nearly a Year

January headline PPI rose 0.5% month over month and 2.9% year over year. Core PPI climbed 0.8% month over month and 3.6% year over year, sharply exceeding expectations. The annual core reading marked the fastest pace since March 2025.

Services costs were the primary driver, with wholesale and retail trade margins jumping 2.5%. While headline goods prices declined due to energy, core goods rose 0.7% month over month. The upside surprise in PPI could feed through to higher core PCE readings, further dampening expectations for near-term Federal Reserve rate cuts.

Key Data to Watch (GMT+8)

22:45 ET — U.S. February S&P Global Manufacturing PMI (Final)

23:00 ET — U.S. February ISM Manufacturing PMI