US durable goods orders fell 1.4%, or $4.4 billion, to $315.5 billion in February, according to the US Census Bureau. This followed a 0.5% fall in January and was worse than the expected 0.5% decline.<\/p>\n
Excluding transportation, new orders rose 0.8%. Excluding defence, new orders fell 1.2%.<\/p>\n
Transportation equipment fell by $6.1 billion, or 5.4%, to $106.1 billion. This category has declined in four of the last five months.<\/p>\n
The data had little effect on the US dollar at the time reported. The US Dollar Index was slightly lower on the day at 99.92.<\/p>\n
We recall looking at the durable goods report from February 2025, which showed a significant 1.4% headline decline. That drop was almost entirely due to transportation orders, which masked some underlying strength in other business investment. It was an early warning signal about weakness in big-ticket manufacturing.<\/p>\n
Looking at the situation today, the most recent data for February 2026 shows a similar, though less dramatic, pattern of industrial softness. New orders for non-defense capital goods excluding aircraft, a key proxy for business spending, have been flat for two consecutive quarters. This suggests corporate caution is becoming entrenched, much like the trend that began in early 2025.<\/p>\n
This manufacturing slowdown is happening while the latest Consumer Price Index (CPI) report showed core inflation remaining sticky at 3.1%. This dynamic puts the Federal Reserve in a difficult position, unable to cut interest rates to support industry without risking a resurgence in inflation. Consequently, futures markets are now pricing in only one potential rate cut for the remainder of 2026.<\/p>\n
For traders, this points toward a strategy of buying volatility, especially within the industrial sector. Purchasing straddles or strangles on major industrial ETFs allows a position to profit whether the sector breaks sharply lower on recession fears or rips higher on a surprise stimulus. The current tension between slow growth and hawkish monetary policy makes a period of calm unlikely.<\/p>\n
Given the specific and continued weakness in transportation, bearish derivative plays on aerospace and heavy machinery manufacturers should be considered. We see value in buying put options on companies that have a high backlog but are facing order cancellations, a trend we saw beginning last year. This provides a targeted way to short the most vulnerable part of the economy without betting against the entire market.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US durable goods orders dropped 1.4% in February, led by transportation; ex-transport rose 0.8%, dollar steady.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-44294","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/44294","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=44294"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/44294\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=44294"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=44294"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=44294"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}