Market Roundup Feb-26

Equities

February has marked the end of a turbulent period for equity markets as a mixture of AI scepticism and inflation concerns dampens performance. Despite NVIDIA’s positive earnings and outlook, the stock slid 4% due to ongoing concerns of overspending in AI and whether continued high growth is sustainable. The financial sector underperformed as inflation reduced Fed rate cut expectations, and shares of American Express and Goldman Sachs fell by 7%. The Supreme Court’s ruling that President Trump’s signature tariff regime was unlawful has restored confidence in equities recently; however, we are yet to see the final implications. 

The Silicon Arms Race: Big Tech Challenges NVIDIA’s Dominance 

As technology behemoths use custom silicon to lessen their reliance on NVIDIA, the semiconductor industry is undergoing significant change. Four major players have emerged, each with their own competitive strategy and advantages in gaining market share in AI infrastructure. 

Google 

Google maintains the industry’s only “full stack” dominance, controlling the data layer (YouTube and Search), silicon (TPU v7, codenamed Ironwood), and the model (Gemini). By bypassing NVIDIA entirely, Google can offer cloud computing to AI partners, like Anthropic, at significantly lower costs, thus positioning itself as a rival “landlord” in the cloud infrastructure market. 

Microsoft 

Microsoft launched its Maia 200 chip (Braga) in January 2026, delivering 40% better performance-per-dollar than NVIDIA in running GPT models. Critically, Microsoft is backing Triton, an open-source alternative to NVIDIA’s CUDA platform, which lowers switching costs for developers seeking to migrate away from NVIDIA silicon and run code on Microsoft’s more economical chips. 

Amazon 

Amazon’s Trainium 3 offers a high-volume, low-cost alternative for AWS users. While NVIDIA emphasises raw computational power, Amazon competes on economics, claiming up to 50% cost savings for companies, including Anthropic. This pricing pressure represents the first significant challenge to NVIDIA’s pricing power in the data centre market. 

Meta 

Meta has deployed its MTIA v3 chip (Santa Barbara) to reduce internal compute costs for Reels and advertising workloads by approximately 44%. By shifting high-volume, inference-heavy tasks to proprietary silicon, Meta is substantially reducing its orders for NVIDIA’s general-purpose GPUs. This cost discipline frees capital for Meta to invest in open-sourcing its Llama 5 model. 

Fixed Income

The Japanese Government Bond (JGB) market is experiencing a twist steepening, characterised by a decoupling of short rates from long-dated yields. The 2s30s spread has widened sharply, with the 2-year yield anchored near 0.60% while the 30-year yield has surged toward 3.85%. This creates a pronounced “twist” at the 7-year maturity, where the curve transitions from flat to steeply ascending, reflecting a historic widening of the term premium. 

The move is driven by the erosion of central bank support for super-long debt. Following the recent snap election, markets are pricing a “fiscal risk premium” tied to Prime Minister Takaishi's aggressive stimulus and tax-cut proposals. With Japan’s public debt projected to remain near 250% of GDP, and the Bank of Japan notably abstaining from aggressive bond-buying operations to cap long-end yields, private investors are demanding substantially higher compensation to absorb an anticipated surge in 20- and 30-year bond issuance. 

This steepening signals that the era of JGBs as a low-volatility global anchor has ended. As domestic long-end yields become attractive to Japanese life insurers and pension funds, a substantial repatriation of capital from US Treasuries and European Bunds is likely, catalysing a broader tightening of global financial conditions, and challenging the yen’s carry-trade status. 

Foreign Exchange - GBP

Sterling weakened 0.7% against the dollar during the week of 5-12 February following political turmoil linked to former UK Ambassador to the US Lord Peter Mandelson. The exposure of Lord Mandelson’s past ties with the convicted criminal, the late Jeffrey Epstein, and the launch of a criminal investigation raised concerns about the credibility and decision-making within the senior levels of government. Prime Minister Keir Starmer’s prior knowledge of the relationship intensified market unease, driving a partial sell-off in British assets and contributing to pound depreciation. Anas Sarwar, the Scottish Labour leader, called for Starmer to step down, amplifying political uncertainty. 

The pound partially recovered following strong statements of support from backbenchers and former Labour leader Ed Miliband, urging Labour MPs to “let Starmer get on with it.” However, the near-term outlook remains sensitive to headlines. Police arrested and subsequently released Lord Mandelson on 23 February, leaving the Pound vulnerable to further political developments. While these percentage moves are modest by historical standards, they are significant in short-term FX markets, where political events can rapidly reprice risk and monetary policy expectations. 

Cryptocurrency - BTC

Bitcoin declined 25% to $66,000 during the week of the 5th of February, reaching its lowest level since President Donald Trump returned to office. The decline reflected a broader trend of reducing exposure to risky assets amid investor concerns about $660 billion in announced AI infrastructure spending. By the 25th ^th of February, Bitcoin had recovered from early-month lows and was trading in the mid-to-high $60,000 range, supported by short-covering and a steadier equity market backdrop. Overall, Bitcoin is down 32% over the past 12 months, erasing gains accumulated during the period following President Trump’s election. 

Commodities

Metals 

Gold and silver came under pressure early in the week following a robust US payroll report and positive Federal Reserve expectations, which reduced safe-haven demand for both metals. Silver plunged approximately 9% on 12 February, while gold fell around 2.8% (Anil and Mukherjee, 2026). Midweek, gold declined an additional 2% as US-Iran talks progressed, easing geopolitical tensions (Anmol Choubey, 2026). However, lingering uncertainties drove gold prices up approximately 2.4% on 18 February (Anmol Choubey, 2026b). 

Analysts expect gold to return to $5,000 as early-year selling and the metal trades within a tight range. Continued central bank buying and hedging of precious metals are expected to support prices over the medium term, though short-term volatility is likely. In the longer run, structural drivers, including production deficits in precious metals and some industrial metals such as copper, underpin a strong buying narrative (Lorenzo Portelli, 2026). 

Energy

Oil prices remain highly sensitive to geopolitical developments. Skandinaviska Enskilda Banken (SEB) analysts noted that US-Iran tensions could swing Brent crude between $60 and $80 depending on news flow (Jao, 2026). On the 17^th of February, oil prices fell 2% to two-week lows (Disavino, 2026), but reversed sharply the following day, surging 4% on heightened US and Israeli military readiness and Iran-Russia naval drills in the Gulf (McCartney and Siddharth Cavale, 2026). 

Price movements this week were driven primarily by geopolitics, with key factors including Iran's nuclear talks and Russia-Ukraine peace negotiations. Oil prices are forecast to remain relatively stable, though many underlying factors remain unpredictable. 

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Authored by: Finley Sutcliffe, Jamie Cresswell, Oliver Hulme, Wilf Beadell.