THE BRRR’s BOTTOM LINE
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Iran closed the Strait of Hormuz despite having constructive nuclear talks with the US yesterday, Big Software continues to bleed from AI reality check, crypto sentiment hits 20-day extreme fear, and tomorrow's FOMC Minutes could reshape June rate cut odds.
Add Thursday's Supreme Court tariff ruling potentially nuking Trump's $118B revenue stream, and a volatility breakout seems inevitable.
This week has several catalysts aligned for a big move. Should the Supreme Court rule against the President and the constitutionality of his tariffs, we expect markets to catch a bid higher. Given the destruction tariff declaration headlines have caused, an unraveling of the policy should spark an upside move in risk assets.
Polymarket has the odds of that the Supreme Court rules against Trump at 74%, but we’ll hopefully learn the outcome later this week. The uncertainty has created a drag on markets.
MACRO
SPX: 6,836 (-0.31%) | DXY: 97.12 (+0.20%) | 10Y: 4.03% | Gold: $4,938 (-0.8%)
Markets reopen to perfect storm as FOMC Minutes tomorrow and Supreme Court tariff decision Thursday could reshape entire fiscal-monetary landscape while rate cut odds hit 52%.
FOMC Minutes Tomorrow: January meeting minutes release 2PM ET Wednesday will clarify Fed's "no hurry" stance after core CPI cooled to 2.4% — CME FedWatch shows 52.7% odds of June rate cut with current fed funds at 3.5-3.75% range
Supreme Court Tariff Nuclear Option: Learning Resources v. Trump decision Thursday could strip executive tariff authority under IEEPA, threatening Trump's $118B annual revenue stream just as deficit spending accelerates — fiscal dominance fears resurface
Dollar Defying Gravity: DXY holding 97+ despite dovish Fed expectations signals structural Global Monetary Reordering continues as foreign central banks diversify reserves — $28T negative NIIP correction accelerating
Gold Consolidating Pre-Breakout: Holding $4,938 despite rate cut hopes as geopolitical premium builds — Morgan Stanley warns Greenland resolution could trigger quick pullback but structural demand from reserve diversification intact
TECH
META: $641.5 (+0.47%) | TSLA: $412.5 (-1.22%) | NASDAQ: 24,805 (+0.23%)
AI spending reality check decimates Big Tech as psychology shifts from rewarding moonshots to demanding profit visibility — every Magnificent 7 member underwater for 2026 in historic breadth collapse.
Mag 7 Massacre Complete: Historic underperformance with Amazon (-13.5% YTD), Tesla (-8.2%), Apple (-4.8%), Google (-3.3%), Meta (-2.7%) all negative for 2026 — first time since 2022 bear market entire cohort lost annual gains
AI ROI Reckoning: Market psychology flipping from celebrating AI capex to questioning timeline for returns as competitive moats shrink under disruption pressure — cloud infrastructure spending facing profit scrutiny
Value Rotation Accelerating: Traditional sectors outperforming as growth premium evaporates — investors fleeing promises for concrete earnings visibility as semiconductor supply reality trumps software dreams
S&P 6,800 Support Test: Key psychological level holding as institutional buyers view AI selloff as entry opportunity — futures rebound suggests smart money accumulating "infrastructure" names at technical support
CRYPTO
BTC: $67,950 (-1.12%) | ETH: $1,989 (-0.94%) | SOL: $84.88 (-1.78%) | F&G: 10
Extreme fear reaches 20-day duration matching July 2022 capitulation while smart money whale accumulation diverges from record $3.8B ETF outflow panic — perfect contrarian squeeze setup emerging.
Historic Fear Duration: Fear & Greed at 10 for 20+ days equals July 2022's capitulation streak yet whale addresses accumulating despite $360M weekly Bitcoin ETF outflows — classic retail panic/institutional accumulation divergence
ETF Exodus Accelerates: $3.8B fled crypto funds with Bitcoin ETFs bleeding $360M weekly and Ethereum funds down $85M as CoinShares attributes outflows to "persistent price weakness" — contrarian indicator flashing
Infrastructure Building in Bear: Solana DeFi TVL holding $6.3B despite price weakness as Firedancer adoption enables 2-3x Ethereum stablecoin volume per Standard Chartered — building in bear creates cycle advantage
GEOPOLITICS
Oil: $63.69 (-0.14%) | EUR/USD: 1.1829 (+0.10%)
Iran closes Strait of Hormuz during Geneva nuclear talks as Revolutionary Guard military drills choke 20% of global oil flows — calculated pressure move while progress reported on sanctions relief within 2 months.
Strait Closure Power Play: Iran's "security precautions" military drills force commercial shipping halt through chokepoint controlling fifth of global oil flows — deliberate muscle-flexing timed perfectly with Geneva nuclear negotiations
Geneva Progress Reported: Iranian Foreign Ministry claims "progress made" on sanctions lifting and nuclear compliance as Trump administration offers full sanctions relief within 2 months for verification — carrot-stick diplomacy intensifying
Energy Weapon Deployed: Supreme Leader Khamenei's warning over US military presence creates powder keg while oil markets remain subdued despite supply chokepoint closure — traders betting on negotiated resolution
NATO Realignment Accelerates: Rubio's Central European tour through Trump-friendly capitals signals pivot from traditional allies as isolationist foreign policy takes shape post-Munich Security Conference
ECONOMIC CALENDAR
Tue Feb 17 — TODAY: Markets Open | Iran Nuclear Talks Geneva Continue
Wed Feb 18 — FOMC Minutes (2:00 PM ET) | Energy Transfer Earnings (AMC) | Palo Alto Networks Earnings (AMC)
Thu Feb 19 — Walmart Earnings (BMO)
Thu Feb 20 — Supreme Court Tariff Ruling (Potential) | Alibaba Earnings (BMO)
Fri Feb 21 — Q4 GDP (8:30 AM ET) | December PCE Inflation (8:30 AM ET)
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