The global macro picture is shifting. China's industrial production year-to-date for February rose to 6.3%, a slight increase from the previous 5.9%, signaling continued strength in Chinese manufacturing. This data point arrives amid ongoing geopolitical concerns, particularly regarding the situation in the Middle East, which is contributing to volatility in energy markets and broader inflation anxieties. Senator Mark Kelly has voiced concerns about the economic impact of the conflict on American families, specifically citing rising gas prices.
U.S. markets reflected this mixed global sentiment. The SPY ETF experienced a decline of -0.57%, closing at $662.29. The QQQ also saw a decrease of -0.59%, settling at $593.72. The DIA fell -0.23% to $466.41 and the IWM dropped -0.33% to $246.59. Amazon (AMZN) shares decreased -0.89% to $207.67. Gold prices also retreated, falling 0.91% to $5015.80 per ounce, potentially indicating moderated inflation expectations or a decrease in safe-haven demand.
These movements occur against a backdrop of increased government spending, with the Trump administration already having spent $12 billion on the war in Iran. This spending, coupled with rising energy costs, is prompting some lawmakers to call for measures such as gas tax relief or taxes on windfall oil profits. The confluence of these factors – Chinese industrial output, geopolitical tensions, and domestic economic pressures – paints a complex picture for global investors.
Macro regimes don't change overnight—but when they do, it matters.