Stagflation Fears Meet Trump’s Tariff Turmoil

Ultima Markets Daily Market Insights – February 23, 2026

The markets are entering the final week of February caught in a massive tug-of-war. Last week delivered a brutal risk outlook to the “stagflation” risk, as US economic growth slowed significantly while inflation remained stubbornly sticky.

To compound the macro headache, trade policy whiplash over the weekend regarding President Trump’s tariffs has injected fresh uncertainty into global equities. In this environment of slowing growth and rising geopolitical risk, capital is aggressively rotating back into safe-haven assets.

US Key Data: The “Stagflation” Ghost Returns

Last week’s data dump presented the worst possible combination for the Federal Reserve:

• The Growth Shock (GDP): US Q4 2025 GDP grew by a dismal 1.4%, massively missing the 2.5% consensus and marking a sharp deceleration from Q3’s 4.4%.
• The Inflation Trap (CPI/PCE): Despite the growth slowdown, January’s Core CPI held firm at 2.5%, meanwhile the Fed’s preferred inflation guage core PCE Price Index came in hotter than expected at 3.0% vs 2.9% consensus.

This is a classic “Stagflation” fear setup for the Dollar, where the US Dollar initially strong but came into pressure on Friday after the sticky inflation data and slow economic growth risk that could complicated Fed policy path in the near-future.

US Dollar Outlook

The US Dollar is currently hovering lower near the 97.40 after last week high near 98.00, looking fragile as it struggles to maintains its footing after the GDP miss and hot PCE data.

USDX, H4 Chart | Ultima Markets MT5

The failure to break above the 98.00 last week suggest that the dollar near-term momentum has shifted back to the bears or at least pressured consolidation. The 98.00 – 97.50 zone continue to be an upper challenge for the Dollar to reverse into broad uptrend.

The 97.50 – 97.80 now the immediate technical ceiling, bulls needs a close above this to reignite the uptrend. If failing to do so, the current macro outlook could pressure the dollar toward the 97.00, while a break below this level could expose the dollar again to a deeper downside to the 96.50 zone.

Trump Tariff Turmoil in Focus

Added to the risk, the recent Trump’s tariff turmoil also added another layer of cloud to the US Dollar and also US equities market. The US Stock Market experienced extreme whiplash on Friday and into the weekend.

The Supreme Court officially struck down President Trump’s sweeping IEEPA tariffs, which initially sparked a massive relief rally in equities. However, Trump immediately countered by threatening a new 15% global tariff via an executive order for a 150-day period.

The “Tariff Turmoil” directly threatens the tech sector’s complex global supply chains (especially semiconductors). While the S&P500 and Nasdaq managed to hold near the psychological level during Friday’s relief bounce, the renewed 15% tariff threat keeps those indices highly vulnerable to a sudden sell-off.

NAS100, Daily Chart | Ultima Markets MT5

Outlook: Expect highly erratic, headline-driven trading. If the Nasdaq fails to hold 25,000 – 24,750 support, it could trigger a rapid unwind toward 24,200.

Gold Outlook: Safe-Haven Shines Above $5,100

Gold is the undisputed winner of the current macro environment. Squeezed by Stagflation fears and Tariff uncertainties, investors are aggressively bidding up the precious metal.

XAU/USD, H4 Chart | Ultima Markets MT5

Gold surged to close the week confidently above the critical $5,100 level, currently trading near $5,150. The weekly candle printed a massive bullish hammer, indicating buyers are firmly in control. A sustainable break above the 5100 may suggest upside may extended.

The immediate upside target is $5,290 (a former support-turned-resistance zone). $5,100 is now the primary floor. As long as Gold holds above this level, the “buy the dip” narrative remains fully intact. The ultimate line in the sand remains the psychological $5,000 mark.

What to Watch Today

• Tariff Headlines (All Day): With a light economic data calendar today, market sentiment will be entirely dictated by the White House. Watch for any official confirmation or retaliation threats regarding the new 15% executive order tariffs.
• Fed Speak (Various Officials): Markets will parse any comments from Fed officials today to see how they balance the weak 1.4% GDP print against the sticky 2.5% inflation data. Any hint of “Stagflation” concern will send Gold higher.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.