The US economy is grappling with an unexpected acceleration in wholesale inflation, which rose 0.5% in January, surpassing analysts' forecasts. The main driver of price increases was services. Meanwhile, in Europe, stock markets are hitting historic highs, supported by solid corporate results, despite problems for giants like BASF. The German chemical conglomerate announced massive cost cuts and job relocations to Asia in response to the industry crisis.
PPI Inflation Spike in the US
The Producer Price Index rose 0.5% in January, a result significantly above market forecasts.
European Stock Market Records
Indices in Europe are posting their longest series of monthly gains in thirteen years.
Crisis at BASF
The German chemical giant is moving jobs to Asia and cutting costs due to poor performance.
Capital Flees Korea
Foreign funds withdrew $5 billion from the Korean chip sector after a wave of gains.
The situation in global markets at the end of February 2026 shows a clear dualism between inflationary pressure in the United States and investment optimism in Europe. Data on the PPI index in the US for January proved a surprise to markets, showing a 0.5% increase. This is a result significantly higher than expectations, which directly translated into concerns about the future path of Federal Reserve interest rates. The main factor driving price increases in the wholesale sector turned out to be services, which compensated for the stabilization of goods prices. At the same time, European stock indices continue their record-breaking run, with stocks heading for their eighth consecutive month of gains – the longest such streak since 2013. Investors enthusiastically received financial reports from key players such as IAG (owner of British Airways), which beat profit estimates, and Netflix, which gained after withdrawing from an expensive battle for broadcast rights. Positive sentiment also prevails in Switzerland, where the economy recorded a slight rebound in the last quarter of 2025, exceeding earlier pessimistic forecasts. Historically, periods of stable stock market bull runs in Europe have often been interrupted by sharp inflationary spikes in the US, which forced central banks into aggressive monetary tightening. A shadow is cast over European industry, however, by the situation in the chemical sector. Giant BASF announced plans for drastic savings and job cuts in Germany, intending to move a significant portion of operations to Asia. This decision results from a persistent downturn and high energy costs, forcing the company into a radical business model overhaul. On Asian markets, meanwhile, major reshuffling was noted in the semiconductor sector – global funds withdrew nearly $5 billion from Korean stocks after a period of intense gains, causing fluctuations in ETF funds. „BASF seeks more cost cuts as 2026 profit could slip” — BASF representative In Great Britain, the pound sterling came under pressure after a local defeat for the Labour Party, which investors read as a signal of political uncertainty ahead of the upcoming general election. Simultaneously, JPMorgan decided to take profits from the Chinese yuan rally, suggesting a more cautious approach to emerging market assets. Global players are now preparing for the release of US labor market data, which will be a key indicator of the world's largest economy's health in the face of resurgent inflation.