Investors are facing a mounting list of questions tied to artificial intelligence, the market's principal driver -- the path of U.S. interest rates, the fate of talks between Washington and Tehran, and the state of the world's biggest economy. The result? They're seeking protection in an asset they appeared determined to avoid just a few months ago.

U.S. Treasury bond yields are lower heading into the holiday shortened week, with benchmark 10-year notes testing the 4% level for the first time since late October as the S&P 500 goes red for the year amid eroding faith in the AI investment trade and traders bet on fewer Fed rate hikes.

Investors are also worried that Iran's military exercises in the Strait of Hormuz could unsettle talks with the U.S. over its nuclear weapons program slated for later today in Geneva, Switzerland.

Meantime, this week China's markets are closed for Lunar New Year celebrations, which will sap liquidity in precious metals markets -- and likely keep a lid on bitcoin prices -- as investors calibrate the impact of those markets on broader risk appetite and the fading equity rally, which has driven down the S&P 500 by more than 2% over the past 10 days.

Slumping stocks, rising geopolitical risks and a tired bull market can make for strange bedfellows, however, and the emergence of Treasuries as a port of safety in the current market lull, just days after budget watchdogs warned U.S. debt could reach $64 trillion within the next decade, is a curious development.

It's even stranger when you consider the "sell America" trade which gripped markets over the second half of last year.

But just like that tattered old raincoat in the hallway closet, which you've been meaning to replace for years, Treasuries are doing a pretty good job of keeping you warm and dry on a wet winter Tuesday.

-- Martin Baccardax

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More Inflation Data Coming as Signs Suggest Soft Landing

This holiday-shortened trading week will bring a fair number of economic data releases, highlighted by Friday's personal consumption expenditures price index. Already inflation data are pointing to the possibility of a soft-landing, which economists call achieving the Federal Reserve's target inflation of 2% annually without a recession.

   -- Former Fed officials thought the economy was tracking a soft landing in 
      late 2024, and then President Donald Trump came into office making tariff 
      and trade threats, slashing government jobs, and throwing planning into 
      chaos. Things seem to have calmed down, with a stabilizing job market and 
      cooling inflation. 
 
   -- The Fed will release the minutes of its January interest rate policy 
      meeting on Wednesday. Policymakers decided to leave the benchmark rate 
      unchanged at that meeting, though two governors dissented and wanted a 
      quarter-point cut. The minutes may shed more light on their internal 
      debate. 
 
   -- On Friday, the Fed's preferred inflation gauge comes out. Economists 
      expect the core personal consumptions expenditures index -- which 
      eliminates food and fuel -- to rise 2.9% for December. That would be a 
      tenth of a percentage point more than before. The top line number is 
      expected to rise 2.8%, same as November. 
 
   -- An early estimate of fourth quarter gross domestic product is also 
      expected this week, with economists forecasting a seasonally adjusted 
      annual growth rate of 2.8%, down from the third quarter's 4.4%. 

What's Next: Trump is studying how artificial intelligence is affecting the economy, particularly rising household utility bills, according to White House advisor Peter Navarro. One possibility is to force big tech companies like Meta Platforms to shoulder the burden the AI build out is putting on the nation's power grid, he said.

-- Liz Moyer and Dan Lam

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Shipping Giant Hapag-Lloyd to Buy U.S.-Listed ZIM

German shipping giant Hapag-Lloyd has agreed to buy U.S.-listed ZIM Integrated Shipping Services in a deal worth $4.2 billion, representing a 58% premium to ZIM's Friday closing price.

   -- Hapag-Lloyd said Monday it had agreed to buy Israeli rival ZIM for $35 a 
      share in cash. ZIM stock jumped more than 30% in early premarket trading 
      Tuesday, while Hapag-Lloyd stock was recovering after an 8% fall in 
      European trading on Monday. 
 
   -- If approved, the transaction would cement Hapag-Lloyd's position as the 
      world's fifth-largest container shipping company, with a fleet of more 
      than 400 vessels. 
 
   -- The state of Israel holds a so-called golden share in ZIM, allowing it to 
      control decisions such as ownership. As part of the deal, the special 
      stake will be transferred to a carved-out container liner business owned 
      by Israeli private-equity fund FIMI. 

What's Next: Markets should brace for more consolidation in the industry. Mergers are one obvious way that shipping giants can add to their overall capacity at a time when freight rates and container volumes are tumbling.

-- George Glover

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A Shrinking Herd, Soaring Prices Vex America's Beef Industry

While beef demand is resilient and companies like Darden Restaurants' LongHorn Steakhouse and rival Texas Roadhouse have enjoyed faster growth than most casual-dining chains since Covid, the beef industry is facing stiff challenges. Cattle herds are shrinking, prices are soaring, and there's little relief in sight.

   -- America's cattle population recently hit a 75-year low. Steak prices are 
      up 55% over the past five years, and ground beef, 69%. Such staples might 
      not weigh on household budgets like car insurance and electricity, but 
      they are frequent cost-of-living reminders to any grocery shopper or 
      restaurant diner. 
 
   -- Cattle and calves numbered 86.2 million in January, a new Department of 
      Agriculture report shows. That is down from a peak of more than 130 
      million head in the mid-1970s. It is the smallest herd since 1951, when 
      America's population numbered 157 million, less than half what it is 
      today. 
 
   -- Small restaurants are struggling more. The Barn Door calls itself the 
      oldest steakhouse in San Antonio. It recently sold a 15-ounce rib-eye 
      grilled over mesquite and charcoal, with sides, for $44.99. Owner Randy 
      Stokes carves his own steaks to contain costs, and tries to be creative 
      with prices without couponing. 
 
   -- Screwworm is partly to blame for the dwindling supply. An outbreak of 
      this parasite in Mexico has halted cattle imports -- typically 4% to 5% 
      of U.S. supply. Brazil and Australia are key suppliers of beef cuts and 
      ground beef, but not cattle, and usually not high-end steak. 

What's Next: About 80% of beef packing is controlled by four companies: Tyson Foods, Brazil's JBS, Cargill, and National Beef. Often blamed for high prices, they are actually losing money and operating far below capacity for lack of cattle, says BMO Capital Markets' Andrew Strelzik. Read Barron's cover story here.

-- Jack Hough

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China Expected to Sharpen Focus on Consumer Confidence, Spending

China enters the Year of the Fire Horse today, representing transformation and a time to break old habits. Some economists expect Beijing to lower its official economic growth target and shift its focus to its domestic challenges, from flagging consumer confidence to the need to rebalance its economy.

   -- Beijing is working to shift from debt-fueled growth toward higher quality 
      growth based on advanced technology and higher consumer spending. While 
      the growth target is expected to be lowered to 4.5% to 5% from 5%, 
      sentiment now is sharply different from the pessimism of a year ago. 
 
   -- Rory Green, head of China research at TS Lombard, thinks Chinese 
      President Xi Jinping could finally be serious about making domestic 
      demand a larger portion of GDP. An indication of that could come in the 
      Five-Year Plan of government priorities, expected to be unveiled this 
      March. 
 
   -- China's property market is still in a downturn that started in 2020, 
      though the pace of deceleration is slowing. Also, property now accounts 
      for roughly 12% of China's gross domestic product, down from around 25% 
      before the pandemic. 
 
   -- China also ended 2025 with a record trade surplus, even as its sales to 
      the U.S. fell because of Trump's tariffs. Beijing has found many 
      countries willing to strike trade pacts, particularly those with an 
      increasingly bumpy U.S. relationship, including India, Canada, and the 
      U.K. 

What's Next: The U.S. and China are expected to maintain a fragile truce until President Donald Trump's expected meeting with Xi in April. The de-escalation in trade and other tensions between the two gives Beijing time to focus on its numerous challenges at home. For more on this read here.

-- Reshma Kapadia and Janet H. Cho

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Warner Bros.' Box Office Streak Continues Amid Takeover Battle

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February 17, 2026 06:43 ET (11:43 GMT)

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