Key Points

• U.S. Equities Under Pressure: The Dow fell nearly 822 points as AI disruption fears and tariff uncertainty weighed on tech and financial stocks.
• China Signals Currency Stability: The PBOC held rates steady for a tenth month while tolerating yuan strength amid slowing growth.
• Panama Canal Flashpoint: Panama voided China-linked port contracts, transferring control to Maersk and MSC in a move seen as a U.S. geopolitical win.
• Bitcoin Risk Reset: Bitcoin dropped over 5% below $63,000 as investors reduced exposure to high-beta assets amid global uncertainty.

February Economic Calendar

Feb 25 — U.S. Consumer Confidence: Provides insight into household sentiment amid rising trade uncertainty.

Feb 26 — U.S. New Home Sales: Signals housing market resilience and rate sensitivity.

Feb 27 — U.S. Initial Jobless Claims: Weekly labor market gauge ahead of broader employment data.

Feb 28 — U.S. Core PCE Inflation: The Federal Reserve’s preferred inflation measure, critical for rate expectations.

Markets Slide as AI Disruption and Tariff Risks Intensify

U.S. equities sold off sharply as renewed fears over artificial intelligence disruption and escalating trade tensions pressured risk assets. The Dow Jones Industrial Average fell nearly 822 points, or 1.7%, weighed down by a 13% drop in IBM, while the S&P 500 declined about 1% and slipped into negative territory for the year. The Nasdaq Composite lost 1.1%, with software, cybersecurity and financial stocks leading losses.

President Trump’s renewed threat to raise global tariffs to 15%, alongside rising U.S.–Iran tensions, added to investor anxiety. Futures were little changed overnight as markets attempted to stabilize.

China Holds Rates Steady as Yuan Strengthens

China’s central bank left its 1-year and 5-year loan prime rates unchanged at 3% and 3.5% for a tenth consecutive month, signaling caution as growth slows and deflation pressures persist. Fourth-quarter GDP expanded 4.5% year over year, the slowest pace since pandemic restrictions were lifted.

Meanwhile, the offshore yuan strengthened to around 6.889 per dollar, with policymakers signaling tolerance for gradual appreciation despite export headwinds. The balancing act underscores Beijing’s focus on currency stability amid weak domestic demand and persistent property-sector strain.

Panama Cancels China-Linked Port Contracts

Panama formally annulled key port concessions held by CK Hutchison near the Panama Canal following a Supreme Court ruling, transferring interim operations to A.P. Moller-Maersk and Mediterranean Shipping Co. The move is widely viewed as a geopolitical win for Washington amid broader U.S.–China tensions over strategic trade infrastructure.

Beijing criticized the decision and warned of economic consequences, while CK Hutchison signaled potential legal action. The dispute adds another layer of uncertainty to global supply chains centered on one of the world’s most critical shipping corridors.

Bitcoin Extends Decline Below $63,000

Bitcoin fell more than 5%, dropping below $63,000 as investors engaged in what analysts described as “tactical de-risking.” The world’s largest cryptocurrency is now down 27% year to date and roughly 50% from its October high above $125,000.

Escalating tariff tensions and heightened geopolitical risks, including developments in the Middle East, have pressured speculative assets. Market participants characterized the move as a broader risk reset rather than a crypto-specific event.

Conclusion

Markets are navigating a period of heightened uncertainty driven by structural AI disruption, renewed trade tensions and geopolitical friction. U.S. equities have entered a consolidation phase, with leadership rotating away from technology and financials.

China’s steady monetary stance reflects limited policy flexibility amid slowing growth and currency considerations. Meanwhile, strategic infrastructure disputes around the Panama Canal highlight intensifying U.S.–China competition. Bitcoin’s decline reinforces broader risk aversion across speculative assets.

With earnings and macro catalysts ahead, investors remain focused on whether markets can regain momentum or extend the current corrective phase.

Investment Insights

AI Rotation Risk: Software and legacy tech remain vulnerable to disruption narratives; favor quality names with durable earnings visibility.

Geopolitical Supply Chain Watch: Panama Canal developments reinforce the need to monitor trade-route sensitivity in global logistics and shipping equities.

China Policy Caution: Stable rates and yuan tolerance suggest limited near-term stimulus; selective exposure to domestic demand plays is prudent.

Risk Appetite Cooling: Bitcoin’s decline signals broader de-risking; maintain disciplined positioning in high-volatility assets.