Crypto Crashes Up As HALO Hiccups; Bullion & Big-Tech Bid Ahead Of NVDA

Tl;dr: Software stocks dead cat bounce lasted a second day, lifting Nasdaq and the S&P; Crypto exploded higher without Jane Street strangling it; Bonds and the dollar were down small; crude oil slipped on a huge inventory builds and a modest ease (Hezbollah) in geopol tensions; precious metals bid.

So mostly green (but feels squeezy)... with all eyes on what comes next - NVDA!

Software stocks managed gains for a second day amid various rebuttals of recent doomsday reports (note that the gains were mainly at the open - squeezy - rather than sustained rotation back into the sector)...

Mega-Cap Tech also surged for the second day in a row ahead of NVDA tonight...

The other troubled sector was Financials and that has also managed two days of gains...

Nasdaq handily outperformed on the back of that strength (second straight 1%-plus gain for the first time in two months) with Small Caps and The Dow both lagging (though all the US Majors were green on the day)...

Nasdaq's rally pushed it all the way up to its 50/100DMA (which are now very tight together)...

It's different today... as the early squeeze failed to follow-through like it did yesterday...

JPMorgan's traders slammed the latest tech reports, noting that AI disruption risk is not new information, but the catastrophizing seems overdone.

The Citrini note – talking about a white-collar employment catastrophe - has contributed to turn the displacement narrative darker but there are many caveats.

For starters, the various compute limitations mean this scenario is quite unlikely even by the early 2030s and I also wouldn’t forget that the hallucination rate is still very high, even on the best models.

Further, reality has often diverged from predictions. Two examples. 1) The various optimistic forecasts on autonomous driving (dating back to 2013); and 2) the mainstream views across doctors during the Victorian-age that a train ride (the AI in early 1800s) could bring significant health consequences (from physical dangers to psychological fears).

Goldman's Delta-One desk-head, Rich Privorotsky, struck a less optimistic tone:

"Hubris of Panic: I was besieged with angry calls about market's overreaction (see AXF or KRE). My conclusion is either software is dramatically mispriced or we must accept that an industry-level disruption of this scale will have profound implications across sectors.

The thematic I have been leaning on for weeks is the “moat check.”

It’s not value vs growth or momentum vs mean reversion. It’s a fundamental question about terminal durability. Is the business physical, producing a legitimate end product, or is it extracting rents from friction in human systems?

AI is about automation and the removal of friction. The problem with the hypothesis of AI disruption is that it cannot easily be disproved.

Multiples are relative constructs, and once in flux they tend to remain unstable until something resets expectations.  Capital appears to be shifting from asset light into asset heavy (hyperscalers the exception)."

However, while HALO (Heavy Asset, Low Obsolesence) names have recently outperformed, today they suffered a hiccup (as software outperformed)...

As Goldman's Rich Privorotsky also warned this morning to "watch credit" and sure enough, credit markets refuse to follow stocks on this bounce higher...

Bloomberg's Cameron Crise highlighted that it's best not to lose sight of what’s going on in credit markets. However, as Bloomberg's Simon White noted, corporate debt ownership continues to shift way from price makers, such as banks, and towards price takers such as ETFs. This presents a burgeoning liquidity risk that is not reflected in spreads currently near historic lows...

White goes on to point out that there is no shortage of catalysts that could provoke wider spreads and a liquidity vacuum. Private credit is one, currently feeling strain from the selloff in software stocks and concerns that loans are souring.

And rising stock volatility, an input into credit pricing models, is another which we are seeing decouple today (with credit risk remaining elevated as stock volatility falls)...

...and while VIX has fallen for two days, Skew is notably still very elevated..

Treasuries were relatively calm with yields modestly higher (1-2bps) on the day (with no major curve moves). ..

Rate-cut expectations (hawkishly) fell today to just 53bps priced in for 2026 (from 65bps last week)...

The dollar limped back lower on the day, now in the red for the week...

Gold rallied back above $5200...

...and Silver topped $91...

Silver's outperformance pushed the Gold/Silver pair down to 57x - the lowest in 3 weeks...

Bitcoin is up over 11% since the Jane Street lawsuit seemingly pulled them out of the market...

Today's 8% surge is the second biggest daily gain since March 2025...

Ethereum also surged back above $2000 to two-week highs...

Very late in the day - after the CME's halt on futures and options trading had lifted - spot prices for metals all plunged (mostly silver and platinum)...

Call us old-fashioned but we could help but notice the collapse happened shortly after CME re-opened...

...and look who is the biggest holder of SLV?

Their MO is to pair trade spot (in this case SLV) and futures, remain market neutral as long as possible while dragging retail in, then maxing prop positions and rug pulling at max pain https://t.co/HZphBDZU3s

— zerohedge (@zerohedge) February 25, 2026

Oil dropped on the back of a major crude build and chatter from Hezbollah that seemed to encourage a belief that Trump is not about to drop big bombs...

Finally, all eyes are on NVDA's earnings tonight but heading in, we note that the giant (AI) tech company's stock has traded in its most narrow trading band over a trailing 60-day window dating back to 2021...

The stock is still well-held by most investor types, according to Goldman Sachs traders, and investors are expected to focus on directional commentary on visibility into 2027, non-traditional customer demand trends, competitive dynamics, and China business trends. Attention will also be geared towards guidance/commentary around Blackwell & Rubin.