From the Trading Desk at Stipelis:
The Macro View-Bonds Are Speaking
Monday, February 16, 2026
Markets were quiet on the surface because of holiday trading, but underneath, something important happened. The bond market moved.
Our Treasury yield index has fallen from 3.94 on January 20 to 3.80. That is not noise. That is a meaningful drop. At the same time, our bond index climbed from 22.38 to 22.94, a solid move higher. When bond prices rise, interest rates fall. And lately, rates have been falling.
This shift lines up with the latest inflation report. January inflation came in softer than expected. That gave investors some breathing room. If inflation cools, the Federal Reserve does not need to push rates higher. That changes the tone of the market.
Here is where intermarket relationships matter.
Commodities usually move opposite the U.S. dollar. When the dollar falls, commodities tend to rise. When the dollar rises, commodities often struggle. Right now, the dollar index is slightly lower on the year. Gold is up more than 13 percent year to date. Crude oil is also higher on the year. That fits the pattern.
But commodities also tend to move opposite bond prices. When bond prices rise and rates fall, commodities often cool off. When commodities rise strongly, it usually comes with rising rates and falling bond prices.
Right now we are seeing something interesting. Bond prices are rising. Yields are falling. Yet gold is strong and oil is firm. That tells us inflation fears are not completely gone, but they are easing just enough to let bonds rally.
Historically, bond prices and stocks often trend in the same direction. Rising bond prices are normally good for stocks because falling rates support growth and borrowing. Falling bond prices are usually a headwind for stocks because higher rates tighten conditions.
The key point is this. The bond market tends to move first. Stocks tend to follow.
So what is the bond market telling us now?
It is signaling that rates may have peaked for the near term. The 10 year yield has pulled back. Shorter term yields are also softening. That is not the behavior of a market that believes inflation is about to surge again.
Stocks have been mixed. The Nasdaq 100 is still negative on the year. The S&P is slightly negative year to date. The Dow is modestly positive. Small caps have bounced. There is rotation happening. Technology has cooled while other areas stabilize.
Bond strength typically supports stocks over time. But there is a catch.
If the dollar were to fall sharply while commodities rise aggressively, that would pressure both bonds and stocks. A falling dollar combined with rising commodities can push inflation expectations back up. That would reverse the recent bond rally.
Right now, that is not happening in a dramatic way. The dollar is slightly lower on the year, but not collapsing. Commodities are firm but not exploding higher across the board. Energy has struggled month to date even though it is positive on the year. Agricultural commodities are mixed. Metals are strong, largely driven by gold.
The bigger story remains rates.
When rates fall, borrowing costs ease. That supports housing, business investment, and consumer confidence. It also supports equity valuations. During deflationary periods, which are rare, bonds can rise while stocks fall. But that is not the base case today. Inflation is cooling, not collapsing.
Globally, growth looks uneven. Japan barely avoided recession. The UK consumer is under pressure. Europe is steady but cautious. India rebounded after recent selling. U.S. markets are digesting earnings and sector rotation. In that kind of environment, falling U.S. yields matter even more because global capital watches them closely.
The bond market is often calmer and more analytical than the stock market. It reacts to inflation, growth, and policy expectations with less emotion. When bonds move, I pay attention.
The recent drop in yields from 3.94 to 3.80 is the most important macro development of the past few weeks. It shifts the balance. It lowers pressure on stocks. It softens financial conditions. It changes the conversation from how high rates might go to how long they stay here.
This week brings more data. Inflation and growth numbers could either confirm the bond market’s message or challenge it. If yields continue to drift lower, that would likely support equities. If yields reverse sharply higher, that would signal inflation concerns are not finished.
For now, the bond market is leaning toward relief.
When bonds rise and rates fall, that is usually a green light for risk assets. The question is whether stocks choose to follow.
the Trading Desk at Stipelis
This is a week to watch the bond market closely.
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