Under the "Ultimatum," Trump is considering a preliminary strike on Iran! Gold, silver, and oil prices rise. Will A-shares have a "good start" after the holiday?

Today is the fourth day of the Lunar New Year, welcoming the Kitchen God—dusting and receiving blessings for prosperity in all endeavors!

First, let’s look at the performance of the overseas markets.

As of the close on the 19th, spot gold rose 0.42%, trading at $4,998.50 per ounce. COMEX gold futures increased 0.09%, at $5,014 per ounce. Spot silver gained 1.32%, at $78.2375 per ounce. COMEX silver futures rose 0.82%.

The three major U.S. stock indexes closed lower: the Dow down 0.54%, the Nasdaq down 0.31%, and the S&P 500 down 0.28%. Among individual stocks, Occidental Petroleum rose over 9%, SanDisk increased over 3%, and Western Digital fell over 4%.

Light crude oil futures for March delivery on the New York Mercantile Exchange rose $1.24 per barrel to close at $66.43, up 1.9%. April Brent crude oil futures on the London ICE increased $1.31 per barrel to $71.66, up 1.86%.

On the news front, data released by the U.S. Department of Commerce on the 19th showed that the U.S. goods trade deficit in 2025 reached a record $1.2409 trillion, an increase of $25.5 billion or 2.1% from the previous year.

The data indicates that in 2025, U.S. goods exports and imports totaled $2.1975 trillion and $3.4384 trillion, respectively. The U.S.-EU goods trade deficit was $218.8 billion, a decrease of $17.1 billion from the previous year, while the trade deficits with Mexico and Vietnam were $196.9 billion and $178.2 billion, respectively, increasing by $25.4 billion and $54.7 billion from the year before.

One of the main justifications the Trump administration used for imposing tariffs on trade partners was that tariffs help reduce trade deficits. Eugene Alemán, Chief Economist at Reiger Financial Group, stated that the 2025 trade deficit indicates that tariffs have had little impact on overall deficit levels. As U.S. companies adapt to tariff changes, monthly trade flows are distorted.

According to CME’s “Fed Watch,” the probability of the Federal Reserve cutting interest rates by 25 basis points by March is 5.9%, with a 94.1% chance of holding rates steady. The chance of a cumulative 25 basis point cut by April is 20.5%, with a 78.5% chance of no change, and a 1.0% chance of a 50 basis point cut. By June, the probability of a 25 basis point cut is 49.8%.

Trump: Iran should reach an agreement with the U.S. within 10 to 15 days

According to Xinhua News Agency, President Trump told the media on the 19th that Iran should reach an agreement with the U.S. within 10 to 15 days.

While aboard Air Force One, Trump was asked about the deadline for a U.S.-Iran deal and responded that he believes “10 to 15 days is enough, almost the limit.”

Earlier that morning, during the first meeting of the so-called “Peace Committee” in Washington, Trump said that whether the U.S. and Iran reach an agreement “will be known in about ten days.” Iran must reach a “meaningful agreement” with the U.S., or “bad things will happen.”

Insiders: Trump considering limited initial strikes on Iran

According to CCTV, on February 19 local time, U.S. sources reported that President Trump is weighing a “limited-scale” initial military strike on Iran to pressure Tehran into accepting U.S. nuclear deal demands.

Sources said that if authorized, the operation could be launched within days, targeting a few military or government facilities, aiming to pressure Tehran rather than initiating full-scale war. This plan is seen as the first phase of a staged approach.

It is also reported that if Iran continues to refuse to halt uranium enrichment as demanded, the U.S. may expand the scope of actions, targeting more Iranian regime facilities, and possibly aiming to destabilize the Tehran government.

Iran sends letter to the United Nations: Not seeking war, will retaliate if attacked

According to CCTV, Iran has sent letters to the UN Secretary-General and the UN Security Council.

In the letters, Iran states that it does not seek tension or war and will not initiate conflict. It also notes that President Trump’s remarks reveal “the real risk of military invasion.”

The letter states that if attacked, Iran will respond, and all bases, facilities, and assets of “hostile forces” in the region will become legitimate targets for retaliation.

Overseas stock markets are warm; can post-holiday A-shares see a “good start”?

While celebrating the Lunar New Year at home, overseas markets have not paused trading. From Europe to the U.S., and then to Asia’s Korea, major stock indices performed strongly during the holiday period, reaching new highs in several countries. Notably, on February 18, the UK FTSE 100 hit a record high of 10,715.77 points; France’s CAC 40 reached a record 8,438.52 points; and on February 19, South Korea’s KOSPI hit an all-time high of 5,681.65 points.

These positive signals have raised expectations for a strong start for A-shares after the holiday.

Regarding the robust European stock market, Wang Peng, Chief Macro Analyst at Galaxy Futures, believes this is due to multiple factors resonating: economic, policy, political environment, and asset allocation adjustments. Economically, several indicators in Europe improved significantly in February: the Eurozone Sentix Investor Confidence Index rose to 4.2, up 6 points from January, reaching a seven-month high; the Eurozone ZEW Economic Sentiment Index improved to -13.6, up 4.5 points from last month, reaching its highest since March 2022. These economic recoveries boost market confidence and investment adjustments.

On the political front, Wang notes that during the Munich Security Conference, U.S. Secretary of State Blinken sought to ease U.S.-Europe relations, signaling a potential shift in the previously tense European political environment, which has rekindled investor confidence.

For U.S. and Korean markets, Zhongda Futures Senior Macro Analyst Zhou Zhiyun states that the Nasdaq and S&P 500 stabilized and rebounded during the holiday. Meanwhile, Asian markets strengthened alongside the tech rebound in the U.S., with Korea’s stock index reaching historic highs driven by tech stocks.

Zhou Zhiyun interprets the tech rally as a sign that concerns over “AI disruptions” are cooling, prompting some funds to seek buying opportunities and showing signs of rotation away from the “Big Seven” U.S. tech giants toward other growth areas.

From a macro perspective, Zhou notes that U.S. industrial output in January increased significantly, December 2025 corporate equipment orders exceeded expectations, and housing starts rose to a five-month high, boosting risk sentiment. The Fed’s January meeting minutes show some members leaning toward holding rates if inflation remains above target, leading to a slight market downgrade in rate cut expectations, though futures still price in two 25bp rate cuts in 2026.

Looking ahead to the domestic stock market after the holiday, Zhou remains optimistic. He believes that as we approach March, key meetings and policy announcements will set the tone for the year; by April, with the start of the earnings season, the market will transition into the “Golden March and Silver April” period, focusing on real economic fundamentals.

“Additionally, ample liquidity supports further market recovery,” Zhou says. The latest data from the State Administration of Foreign Exchange shows that in December last year, bank foreign exchange settlement and sales surplus reached a record $99.9 billion.

Furthermore, historically since 2010, the probability that the CSI 500 outperforms the SSE 50 after the Spring Festival is about 93%. Small- and mid-cap stocks are more likely to outperform large caps, so investors are advised to pay attention to opportunities in the CSI 500 and CSI 1000 indices,” Zhou adds.

Wang Peng believes that Korea’s new highs may also signal a bright outlook for China’s A-shares after the holiday.