Crypto World
SEC slashes stablecoin haircut from 100% to just 2%
SEC cuts payment stablecoin haircuts to 2%, boosting on‑chain settlement economics for broker‑dealers.
Summary
- New SEC FAQ says staff “would not object” if broker‑dealers apply a 2% capital haircut to qualifying payment stablecoins, versus the prior de facto 100% deduction.
- The shift follows the GENIUS Act, aligning compliant stablecoins with conservative money market funds and enabling $100 of tokens to count as $98 toward net capital.
- BTC trades near $68.1k on ~$33B volume, ETH around $1.96k on ~$18B, while USDT holds $1 with roughly $57B–$68B in 24h turnover as the largest dollar‑linked stablecoin.
The Securities and Exchange Commission has quietly delivered one of its most market-friendly crypto moves to date, slashing the capital “haircut” on qualifying payment stablecoins for broker-dealers from 100% to just 2%. In practice, that means $100 of approved stablecoins can now count as $98 toward a firm’s net capital, putting them on par with conservative money market funds.
In a new FAQ from the Division of Trading and Markets, the agency said staff “would not object if a broker-dealer were to apply a 2% haircut on proprietary positions in a payment stablecoin when calculating its net capital.” SEC Commissioner Hester Peirce, who has been pushing for more workable rules around tokenization and settlement, framed the shift as a long-overdue correction to a punitive regime that had effectively rendered stablecoin balances “worthless for net capital purposes.” Until now, many firms assumed a 100% deduction, a stance that made on-chain settlement uneconomic for regulated dealers and limited the use of stablecoins in securities workflows.
Market lawyers and trading desks see the move as a direct follow-through on last year’s GENIUS Act, which established reserve and oversight standards for payment stablecoin issuers and signaled that compliant tokens would be treated more like cash equivalents than exotic derivatives. “This is a big deal,” wrote Prof. Tonya Evans on X, noting that “stablecoins are now treated like money market funds on a firm’s balance sheet.” Others argue the guidance, combined with the SEC’s updated crypto FAQ clarifying that exchanges and ATSs can pair crypto asset securities with non-securities such as bitcoin, sets the stage for deeper integration between traditional market structure and on-chain liquidity.
Major cryptocurrencies trade sideways
The timing lands squarely in a maturing macro backdrop for digital assets. Bitcoin (BTC) trades near $68,100, with a 24‑hour range of roughly $65,600–$68,300 on about $33B in turnover. Ethereum (ETH) changes hands around $1,960, after a 24‑hour low near $1,914 and high close to $1,980, with roughly $18B in volume. Tether (USDT) holds its peg near $1.00, posting about $57B–$68B in 24‑hour trading volume as the largest dollar-linked stablecoin by market depth. This parabolic move comes as digital assets continue to trade as the purest expression of macro risk appetite.
Policy watchers now expect the haircut decision to feed into upcoming debates over broader crypto market-structure legislation, including the CLARITY Act and parallel efforts flagged as “two big crypto regulations” that could land as early as this summer. For broker-dealers, the signal is blunt: the SEC is finally willing to let stablecoins sit inside the regulated plumbing, rather than forcing them to orbit it from the outside.
Lower gas costs have turned Ethereum into a playground for mass address poisoning, with scammers hitting thousands of wallets daily.
Ethereum has spent years trying to fix high fees, and recent upgrades finally made transactions cheaper. But while they solved one problem, they may have opened the door to another.
Leon Waidmann, head of research at Lisk, noted in an X post on Wednesday, Feb. 18, that network activity is booming, with stablecoin volume hitting $7.5 trillion in a single quarter while transaction fees stayed under a dollar.
“Record usage. Record cheap. At the same time. The biggest divergence between fundamentals and price in all of crypto right now,” he noted.
But the growth may hide a more alarming reality. A recent study by blockchain researcher Andrey Sergeenkov finds address poisoning attacks surged significantly after the December Fusaka upgrade, which cut gas fees sixfold and made spam attacks cheap enough to scale.
Address poisoning works by sending tiny transfers from addresses that look like the victim’s real contacts. If the victim copies the wrong address from their history, funds get stolen. Sergeenkov says attackers treat this like a lottery, sending millions of cheap transactions in the hope of a few big payoffs.
Unintended Consequences
Before Fusaka, attackers were sending roughly 30,000 dust transactions per day, according to Sergeenkov’s analysis of 101 tokens between Sept. 1, 2025, and Feb. 13 this year.
But after the upgrade, lower fees made mass poisoning viable in a way that wasn’t possible before, and daily dust transactions jumped to 167,000, peaking at about 510,000 in one day in January.
In just over two months after Fusaka, victims lost more than $63 million, 13 times the $4.9 million lost in a comparable prior period, the data shows.
“There is nothing wrong with lowering fees, but the security problems that cheap transactions amplify should have been addressed before the upgrade. When the Ethereum Foundation claims it is building trillion-dollar security, user safety must be the strictest priority over growth metrics,” Sergeenkov writes.
Sergeenkov noted that a single transfer accounted for a large share of the post-Fusaka losses, when attackers stole $50 million in USDT on Dec. 19, 2025. Even leaving that out, total losses still came to $13.3 million, 2.7 times higher than the pre-Fusaka period, he concluded.
The prediction market’s Dutch arm, Adventure One, allegedly offered illegal bets, including on elections in the Netherlands.
The Netherlands Gambling Authority said it imposed a penalty on prediction markets platform Polymarket’s Dutch arm, Adventure One, for offering gambling to residents without a license.
In a Tuesday notice, Dutch authorities ordered the Polymarket company to “cease its activities immediately,” or face up to $990,000 in fines. According to authorities, Adventure One was in violation of Dutch law for offering illegal bets, including those on local elections, and the company had not responded to requests to address these activities.
”Prediction markets are on the rise, including in the Netherlands,” said the Netherlands Gambling Authority’s director of licensing and supervision, Ella Seijsener. “These types of companies offer bets that are not permitted in our market under any circumstances, not even by license holders.”
Polymarket and other platforms offering event contracts on prediction market platforms face similar scrutiny in the United States, where many individual state authorities have filed lawsuits over sports gambling. However, the chair of one of the federal financial regulators, the Commodity Futures Trading Commission, said on Tuesday that he would defend the agency’s “exclusive jurisdiction” over prediction markets, criticizing state-level action.
Related: Polymarket’s lawsuit could decide who regulates US prediction markets
Cointelegraph reached out to Polymarket for comment, but had not received a response at the time of publication. The company’s chief legal officer, Neal Kumar, said on Feb. 9 that Polymarket “welcome[s] dialogue with other states while the federal courts” consider the issue of jurisdiction in the US.
Dutch tax on crypto passes House of Representatives
The Polymarket crackdown in the Netherlands came within a week of the country’s House of Representatives advancing a proposal to introduce a 36% capital gains tax on investments that would likely include cryptocurrencies. If passed by the Dutch Senate and signed into law, it could take effect as early as 2028.
Magazine: Big questions: Should you sell your Bitcoin for nickels for a 43% profit?
Key takeaways:
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A minor 4.3% Bitcoin price increase to $69,600 could trigger over $600 million in forced liquidations for bearish traders.
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Rising network hashrate and the BIP-360 quantum security proposal are helping to diminish long-term technical concerns.
Bitcoin (BTC) has remained confined within a relatively tight range of $65,900 to $70,500 over the past week. This stagnation has encouraged bearish traders, particularly as other major asset classes displayed resilience. However, even if Bitcoin requires months to reclaim the $90,000 level, excessive bearish confidence could trigger a wave of forced liquidations in futures positions, rapidly shifting momentum back to the bulls.
According to CoinGlass estimates, a price rally to $69,600 would force the liquidation of over $600 million in short BTC futures. For context, when Bitcoin climbed from $60,200 to $70,560 on Feb. 6, short liquidations totaled $385 million. Currently, a mere 4.3% move upward from the $66,700 level could deliver an even more significant blow to those betting on further declines.
Bulls may also find a catalyst in weakening macroeconomic data. The US reported sluggish gross domestic product growth for the fourth quarter of 2025, with an annualized rate of 1.4% falling short of the 2.9% analysts expected, per Yahoo Finance. This slower economic activity negatively impacts corporate earnings outlooks, typically reducing investor appetite for stock market exposure.
Meanwhile, underlying US inflation rose more than anticipated in December, dampening hopes for near-term interest rate cuts. The US personal consumption expenditures price index, excluding food and energy, increased by 0.4% month over month. As the S&P 500 loses bullish steam, investors may be forced out of their comfort zones to seek higher returns in onchain markets.
Escalating Middle East tensions may prompt investors to seek alternative hedges, particularly after gold prices rallied 25% in just three months. Gold’s market capitalization has climbed to a staggering $35.2 trillion—nearly eight times larger than Nvidia (NVDA US), which sits at $4.6 trillion.
As Bitcoin trades approximately 47% below its all-time high, the risk-reward profile for the cryptocurrency may become increasingly attractive to macro traders. For now, Bitcoin bears retain control, as evidenced by the lack of demand for long positions in the futures market.
The BTC perpetual futures funding rate has failed to stay above the 6% neutral threshold over the last two weeks. More telling is the recent stretch of negative funding rate, suggesting that bears are committed to their positions even as Bitcoin retests the $66,000 support level. Regaining conviction remains a hurdle for the bulls, who witnessed $1.6 billion in liquidations during the three-day crash that started on Feb. 6.
Related: Bitcoin ETFs shed $166M as BTC heads for worst start in years
Recovering hashrate and BIP-360 progress strengthen Bitcoin network security
While some of Bitcoin’s recent weakness was attributed to network security concerns, those risks are now dissipating.
The seven-day average hashrate has recovered to 1,100 exahashes per second, matching levels from late January. Earlier fears that miners were abandoning the network to pivot toward the artificial intelligence sector have proven premature, as the industry shows remarkable resilience.
Furthermore, the introduction of BIP-360 has addressed much of the uncertainty surrounding quantum computing threats. This proposal outlines a framework for post-quantum protection through a backwards-compatible soft fork. By removing the vulnerable key-path spend found in Taproot, the proposal hides public keys onchain until the moment of spending.
This technological roadmap provides a clear path for bulls to regain the narrative, potentially forcing a short squeeze that could propel Bitcoin back above $70,000.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
XRP remains under sustained bearish pressure across both its USDT and BTC pairs, with the price structure continuing to print lower highs and lower lows. Despite short-term bounces from support levels, the broader trend favors sellers as the price trades below key moving averages and within a descending structure.
Ripple Price Analysis: The USDT Pair
On the XRP/USDT chart, the price is trading inside a well-defined descending channel, consistently rejecting dynamic resistance from the midline of the channel, the upper trendline, and the 100-day and 200-day moving averages. The recent bounce from the $1.20 demand zone failed to reclaim the $1.80 supply area, reinforcing the bearish structure and confirming that rallies are still corrective in nature.
The RSI also remains below the neutral 50 level and continues to trend weakly, signaling a lack of bullish momentum. As long as XRP stays below the mid-channel resistance and the 100-day and 200-day moving averages, located near $1.90 and $2.30 levels, respectively, the downside risk toward the lower channel boundary remains elevated, with the $1.20 zone acting as critical structural support.
The BTC Pair
Against Bitcoin, XRP is also showing relative weakness, trading below both the 100-day and 200-day moving averages, which are both located above the 2,200 sats area, after failing to hold prior breakout gains. The rejection from the 2,200-2,400 sats resistance zone confirms that sellers are defending higher levels, while the price compresses near a key horizontal support band at 2,000 sats.
Momentum on the XRP/BTC pair is neutral-to-bearish, with the RSI struggling to establish sustained strength above 50. A breakdown below the current support region could open the door for further relative underperformance, while reclaiming the moving average cluster would be the first signal that XRP is beginning to regain strength versus BTC.
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The United States Supreme Court ruled on Friday that President Donald Trump could not use national emergency powers to levy tariffs during peacetime.
US President Donald Trump announced a 10% global tariff on Friday following the Supreme Court’s ruling striking down his authority to levy tariffs under the International Emergency Economic Powers Act (IEEPA).
Trump was critical of the Supreme Court’s decision, calling the decision “ridiculous” at Friday’s press conference, and said that he will levy the tariffs under different legal methods, including the Trade Expansion Act of 1962 and the Trade Act of 1974. Trump said:
“Effective immediately. All national security tariffs under Section 232 and Section 301 tariffs remain fully in place. And in full force and effect. Today, I will sign an order to impose a 10% Global tariff under Section 122 over and above our normal tariffs already being charged.”
Trump’s tariffs have repeatedly caused severe downturns in markets considered high risk, including crypto and equities, as the threat of tariffs fuels uncertainty and shakes investor confidence.
Related: Bitcoin ignores US Supreme Court Trump tariff strike amid talk of $150B refund
The Supreme Court strikes down Trump’s authority to levy tariffs under emergency powers
Trump levied a 25% tariff on most goods coming in from Canada and Mexico, and a 10% tariff on goods coming in from China under the IEEPA, framing both tariffs as a response to national security threats.
An influx of drugs from foreign countries created a “public health crisis,” according to Trump, while trade deficits with China threatened the industrial manufacturing base in the US, he alleged.
However, the Supreme Court rejected both premises as national security threats under the IEEPA and said that the Executive Branch does not have the authority to levy tariffs under the IEEPA during peacetime.
“In IEEPA’s half-century of existence, no president has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope,” the ruling said.
“Article I, Section 8, of the Constitution specifies that ‘The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.’ The Framers recognized the unique importance of this taxing power,” the Supreme Court ruled on Friday.
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Data from more than 120 token launches shows that early sell pressure, not market timing, largely determined whether new tokens thrived in 2025.
New tokens struggled to find a floor in 2025, with early trading dynamics often setting a trajectory that proved hard to reverse as the year wore on, data shows.
An 80-page analysis by Arrakis Finance found that about 85% of tokens launched last year finished below their initial price, after reviewing 125 token generation events (TGE) and surveying more than 25 founding teams.
The data also shows that nearly two-thirds of tokens were already down within the first seven days, and only 9.4% of tokens that declined in the first week after TGE ever recovered to their launch price at any point later in the year. In most cases, early drawdowns deepened rather than reversed.
Airdrops were one of the strongest sources of immediate selling. Across multiple launches, Arrakis observed that up to 80% of airdrop recipients sold their positions on the very first day of TGE, creating concentrated sell pressure.
“The baseline assumption should be that most of an airdrop will be sold; recipients have zero cost basis and expect prices to decline, making immediate selling rational,” the report states.
Market-making structures also mattered. Arrakis says liquidity was often mispriced, prompting traders to take quick exits.
“Liquidity depth is your buyer against sell pressure. Depth needs to absorb selling from airdrops, exchange allocations, and market maker loans without catastrophic price impact,” the report notes.
Arrakis concludes that token outcomes in 2025 were largely decided by launch mechanics rather than market cycles. Early supply shocks, not macro conditions, determined whether tokens stabilized or slid, and once early confidence was lost, recovery was statistically rare.
That finding broadly aligns with separate research from Dragonfly Capital, which recently found little difference in long-term performance between tokens launched in bull versus bear markets.
As Dragonfly Capital managing partner Haseeb Qureshi explained, regardless of the timing, most tokens don’t perform well over time. Bull market launches recorded a median annualized return of about 1.3%, while bear-market launches came in at -1.3%.
The Supreme Court of the United States (SCOTUS) issued a ruling on Friday striking down most of US President Donald Trump’s tariffs, with six of the nine Supreme Court justices ruling that the Executive Branch lacks authority to levy tariffs under the International Emergency Economic Powers Act (IEEPA).
“IEEPA does not authorize the President to impose tariffs,” Friday’s ruling said, adding that the president has “no inherent authority” to impose tariffs during peacetime using the statutes in the IEEPA. The ruling read:
“In IEEPA’s half-century of existence, no president has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope. That ‘lack of historical precedent,’ coupled with the breadth of authority that the President now claims, suggests that the tariffs extend beyond the President’s ‘legitimate reach.’”
Trump claimed that the purported inflow of drugs from Canada, China and Mexico, as well as the “hollowing out” of the US industrial base, constituted a national emergency under IEEPA that justified the tariffs, which the court rejected.
Trump criticizes court, says he’ll get tariffs reinstated
In a press briefing following the decision, Trump lashed out at the justices who voted to strike down the tariffs and vowed to get them reinstated, Politico reported.
“The Supreme Court’s ruling on tariffs is deeply disappointing, and I’m ashamed of certain members of the court, absolutely ashamed, for not having the courage to do what’s right for our country,” Politico cited him as saying.
He said he would reinstate the tariffs by using “other alternatives.”
Trump’s tariffs sent shockwaves through asset markets in 2025, causing severe downturns in crypto and equities when a new round of tariffs was announced or even threatened, fueling macroeconomic uncertainty.
Related: US stocks, crypto rise after Trump pauses planned European tariffs
Trump claims tariffs could replace income tax, but crypto markets are paying the price
In October 2024, while on the campaign trail, Trump floated the idea of replacing the federal income tax with revenue generated from tariffs. Trump said the tariffs would dramatically lower the US budget deficit.
Federal taxes would be “substantially reduced” for individuals and households making less than $200,000 per year once tariff revenue started rolling in, Trump said in April 2025.
Trump announced 100% tariffs on China on Oct. 10, 2025. Within minutes, crypto markets plummeted, and the price of Bitcoin (BTC) dropped from a high of about $122,000 to about $107,000 the same day the tariffs were announced.
Analysts cited several reasons for the crash, including excessive leverage. However, traders overwhelmingly saw the 100% China tariffs as the catalyst for the crypto crash, according to market sentiment platform Santiment.
Crypto prices have yet to recover from October’s crash, and BTC remains nearly 50% below its all-time high of over $125,000 reached on October 6, despite Trump walking back his tariff policies.
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Metaplanet denied claims of hidden activity, and maintained that all Bitcoin purchases, wallet addresses, and capital deployment decisions were publicly disclosed in real time.
Metaplanet’s CEO Simon Gerovich said claims that the firm’s disclosures are insincere are “inflammatory and contrary to the facts.” He added that over the past six months, as volatility increased, the Japanese public company allocated more capital to its income business and sold put options and put spreads, which are actively managed as option positions.
The response follows accusations circulating online questioning Metaplanet’s disclosure practices and use of shareholder funds. The claims state that Bitcoin purchases were not disclosed promptly, including a large purchase made near the September price peak using proceeds from an overseas public offering, followed by a period without updates.
Gerovich’s Defense
In his latest post on X, Gerovich said part of these funds was used to purchase Bitcoin for long-term holding, and that these purchases were disclosed at the time they were made. The exec added that all BTC addresses are publicly available and can be viewed through a live dashboard, which allows shareholders to check holdings in real time. He went on to assert that Metaplanet is one of the most transparent listed companies in the world.
Metaplanet made four purchases during September and announced all of them promptly. While the month was a local peak, Gerovich stated that the company’s strategy is not about timing the market, maintaining that the focus is to accumulate Bitcoin long-term and systematically, and that every purchase is disclosed regardless of price.
On options trading, Gerovich noted the criticism stemmed from a misunderstanding of the financial statements. He said selling put options is not a bet on BTC’s price rising, but a way to acquire Bitcoin at a cost lower than the spot price through premium income. He explained that this strategy reduced effective acquisition costs in the fourth quarter. He revealed that Bitcoin per share, the company’s primary key performance indicator, increased by more than 500% in 2025.
Financial Statements And Borrowings
On financial results, Gerovich clarified that net profit is not an appropriate metric for evaluating a Bitcoin treasury company. He pointed to the operating profit of 6.2 billion yen, which indicates a growth of 1,694% year over year. According to the exec, the ordinary loss comes solely from unrealized valuation changes on long-term Bitcoin holdings that the company does not intend to sell.
Three disclosures related to borrowings were made – when the credit facility was established in October, and when funds were drawn down in November and December. Borrowing amounts, collateral details, interest rate structures, purposes, and terms were disclosed. The identity of the lender and specific interest rate levels were not disclosed at the counterparty’s request, despite the terms being favorable to Metaplanet.
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Washington erupted in political crossfire Friday after the Supreme Court of the United States struck down President Donald Trump’s sweeping global tariffs.
The ruling triggered sharp partisan reactions and exposed a widening divide over trade, executive power, and the country’s economic future.
Partisan Firestorm Erupts as Lawmakers Clash Over Trade, Power, and $150 Billion in Tariffs
In a 6–3 decision, the Court ruled that Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA) when he imposed broad “reciprocal” tariffs in 2025 without clear authorization from Congress.
The ruling invalidates most of those global duties, marking a major setback for a signature pillar of Trump’s second-term economic agenda.
Just like how stock and crypto markets reacted, the political reaction was immediate — and explosive.
Democrats Declare Victory
Senate Democratic Leader Chuck Schumer framed the ruling as a consumer win.
“This is a win for the wallets of every American consumer. Trump’s chaotic and illegal tariff tax made life more expensive and our economy more unstable.”
He added:
“Trump’s illegal tariff tax just collapsed — He tried to govern by decree and stuck families with the bill. Enough chaos. End the trade war.”
Similarly, Senator Elizabeth Warren emphasized the financial toll on households and small businesses.
“No Supreme Court decision can undo the massive damage that Trump’s chaotic tariffs have caused. The American people paid for these tariffs, and the American people should get their money back,” she stated.
In a broader statement, Warren argued that any refunds stemming from the ruling “should end up in the pockets of the millions of Americans and small businesses that were illegally cheated out of their hard-earned money.”
House Budget Committee Ranking Member Brendan Boyle echoed the sentiment:
“This ruling is a victory for every American family paying higher prices because of Trump’s tariff taxes. The Supreme Court rejected Trump’s attempt to impose what amounted to a national sales tax on hardworking Americans.”
Republicans Split Over Executive Power
Republican reaction, however, revealed a party divided between constitutional purists and economic nationalists.
Senator Rand Paul praised the decision as a safeguard against executive overreach.
“In defense of our Republic, the Supreme Court struck down using emergency powers to enact taxes. This ruling will also prevent a future President such as AOC from using emergency powers to enact socialism,” he said.
But Senator Bernie Moreno sharply condemned the Court’s move:
“SCOTUS’s outrageous ruling handcuffs our fight against unfair trade that has devastated American workers for decades. These tariffs protected jobs, revived manufacturing, and forced cheaters like China to pay up,” he noted.
Moreno warned that “globalists win” under the ruling and called for Republicans to codify the tariffs through reconciliation legislation.
Trump Fires Back
Trump himself reportedly responded with a single word during a White House breakfast with governors:
“Disgrace.”
The US President also signaled that his administration has a “backup plan,” hinting at possible efforts to reimpose tariffs through alternative legal authorities such as Section 301 or Section 232.
A Constitutional and Economic Flashpoint
Beyond the immediate political theater, the decision represents a rare rebuke of executive trade authority from a conservative-majority Court.
The ruling reinforces Congress’s constitutional control over taxation and trade regulation, limiting the scope of emergency economic powers under IEEPA.
At the same time, it raises practical questions about potentially billions in tariff refunds and whether lawmakers will attempt to restore elements of Trump’s trade policy through new legislation.
What began as a legal battle over tariffs has evolved into a broader confrontation over presidential power, economic nationalism, and who ultimately controls America’s trade agenda.
“The Supreme Court got it right. But they also did Trump a huge favor, as his tariffs are harming the U.S. economy and are paid by Americans. But since the tariff revenue will now stop and past revenue must be returned, the already rising U.S. budget deficit will soar. Got gold?” Peter Schiff quipped.
The fight is far from over.
The US stock market recovered sharply on February 20, after the Supreme Court struck down President Trump’s tariffs in a landmark 6-3 ruling. The S&P 500 is trading around 6,890 at press time, up 0.45% from yesterday’s close, at the time of writing.
Tech (XLK) leads the rebound on tariff relief while Energy (XLE) gives back early gains despite rising oil prices. Alphabet (GOOGL) stands out, almost independently, with a 3.8% surge as it attempts to break free from a bearish pattern.
Top US Stock Market News:
Wall Street Recovers From Stagflation Scare As Tariff Ruling Sparks Relief Bounce
Wall Street faced one of its most dramatic intraday reversals on February 20, 2026. The morning opened with panic as the “data deluge” delivered a stagflation-like combination.
Advance Q4 GDP slowed sharply to 1.4% (well below the 2.8% consensus), while Core PCE accelerated to 3.0% YoY, its hottest reading since mid-2025. S&P 500 futures dropped immediately after the 8:30 AM ET release.
But the mood flipped mid-session when the Supreme Court struck down President Trump’s sweeping emergency tariffs in a landmark 6-3 ruling. Markets interpreted the decision as a major deflationary catalyst going forward.
The S&P 500 is trading at approximately 6,890 at press time, up 0.45% from yesterday’s close. Moreover, the index is now flirting with a strong zone near 6,888.
A sustained move above this level opens the path toward 6,959, and clearing that could prime the index for the psychological 7,000 milestone.
On the downside, 6,775 is the key support to watch. A break below that level would invite weakness toward 6,707.
However, upside conviction is not without risk. Experts are already flagging that the tariff ruling may not be the final word — the administration could pursue alternative tariff mechanisms, which could weigh on sentiment as the session progresses.
A move to key resistance still requires roughly a 1% push from current levels.
The Nasdaq leads the recovery, up 172 points (0.76%), and the DOW is up 68 points, at the time of writing.
The CBOE Volatility Index (VIX) dropped sharply, falling approximately 5%. The move below 20 signals that the initial stagflation panic has eased and the market is shifting back toward a cautiously optimistic posture.
The tug-of-war is clear: stagflation data pulling markets down, tariff relief pulling them up. Onto the sectors now.
Tech Rallies While Energy Dips, But Builds Bullish Case
The sector story on February 20, 2026, takes an unexpected turn. The surface numbers tell one story, but the charts tell another.
Technology (XLK) is up 0.36% at $140.72, benefiting from the Supreme Court’s tariff strike-down as lower import costs directly support hardware and semiconductor supply chains.
However, the rally faces a ceiling. XLK attempted to cross above the $141.29 resistance, but sellers stepped in. A daily close above this level is needed to open the path toward $144.78 and eventually the $149–$150 zone.
A failure to hold above $139 would flip the short-term structure bearish. The tariff relief provides the US stock market catalyst, but with Core PCE at 3.0%, reinforcing higher-for-longer rates, tech valuations remain under pressure.
Energy (XLE) tells the opposite story. The sector looked strong as US-Iran tensions pushed oil higher: WTI held above $66 and Brent above $71. But gains faded through the session, with XLE now down 1.09% since yesterday.
Yet the XLE chart tells a more constructive story underneath the red. The ETF appears to be consolidating inside a bullish flag. If the breakout confirms above $55.90, it could target $60.29 — roughly a 10% move.
The full measured move from the previous leg projects a potential 27% rally. A drop below $53.19 would invalidate the setup.
Alphabet (GOOGL) Surges As Bears Lose Grip
Alphabet (GOOGL) is the standout US stock market mover on February 20, 2026, surging approximately 3.8% to trade around $316. The stock has shown sustained buying momentum with no significant upper wick, yet, a sign that sellers have not stepped in to cap the bounce.
The move is notable because Alphabet had been trapped inside a bearish flag pattern after pulling back from its early February highs. Today’s surge is attempting to break down that bearish structure, reversing off the $296–$300 support zone and pushing toward pattern invalidation.
However, Alphabet is not out of the woods yet. A sustained move above $327 — extending to $330 — is needed to fully invalidate the bearish setup and confirm a larger bullish reversal. Until those levels are cleared, the risk of a failed breakout remains real.
On the downside, a drop back below $304 would weaken the breakout attempt and reintroduce bearish pressure. Further weakness under $296 could accelerate selling, potentially re-testing lower supports and resuming the bearish flag pattern — erasing today’s entire gain.
Within Communication Services, Alphabet is leading while Meta also posts gains, as over 51% of stocks are in the green.
While other sectors stabilize with muted moves, Alphabet’s sizable independent rally signals that dip-buyers are aggressively positioning in AI-linked growth names.
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