ISM Manufacturing Surge Rewires Cross-Asset Playbook as Dollar, Equities, and Crypto Diverge

When the ISM Manufacturing PMI prints a 40-month high, you expect the usual suspects to rally, cyclical stocks, the dollar, maybe a few high-beta commodities. What you don’t expect is the entire cross-asset playbook to get thrown out the window, with equities, the dollar, and even battered crypto assets all moving in their own orbits. Welcome to February 2026, where the macro backdrop is less a coherent narrative and more a Jackson Pollock painting of risk-on, risk-off, and risk-what?

The numbers don’t lie. The latest ISM Manufacturing PMI, as reported by Cointelegraph and Bloomberg, hit its highest level since late 2022, sparking a broad-based rally in US equities. The S&P 500 and Dow Jones both notched gains, with tech names riding the coattails of robust factory data. The dollar, meanwhile, surged against a basket of currencies, as traders bet on a more hawkish Fed response to the economic heat. Commodities, especially precious metals, didn’t get the memo, gold and silver, after a wild January, sold off hard as risk appetite returned.

But the real curveball came from crypto. Bitcoin, after a bruising slide, managed to trim losses and stabilize near $76,000. Ethereum, battered by whale liquidations and bearish flow data, found a floor at $2,200. Even XRP, the market’s favorite regulatory soap opera, snapped a five-day losing streak as US economic data lifted sentiment. The result? A market that looks coordinated on the surface, but is actually running three different playbooks at once.

Historical context is key. The last time ISM Manufacturing printed this hot, in mid-2021, the market reaction was textbook: dollar strength, equity rally, commodities bid, crypto following risk-on cues. This time, the correlations are breaking down. Gold’s +23% rally in January was followed by a sharp selloff, while equities shrugged off the metals rout. Crypto sentiment is in the gutter, Fear & Greed Index at 14, yet price action is stabilizing. The macro backdrop is a stew of strong US data, persistent inflation fears, and a Fed that’s suddenly less predictable.

The cross-asset divergence is the story. The dollar’s rally is pressuring emerging market FX, but US equities are ignoring the usual headwinds. Commodities are trading like the party’s over, while crypto is trying to find its footing in the chaos. The market’s willingness to ignore traditional correlations is a warning sign for anyone still trading off last year’s playbook. The algos are adapting, but so are the risks.

The ISM print has traders repricing Fed expectations. A hotter manufacturing sector means the Fed can’t pivot as quickly as some hoped, but equities are betting that growth will outpace rate hikes. The options market is pricing in higher volatility across asset classes, with VIX futures ticking up even as spot indices rally. Crypto, for its part, is seeing a spike in open interest, but the flows are mixed, whale longs vs. bearish flow data, as NewsBTC put it. The result is a market that’s both complacent and on edge, waiting for the next shoe to drop.

Strykr Watch

Technical levels are flashing caution. The S&P 500 is approaching overbought territory, with resistance looming just above current levels. The dollar index is breaking out, but faces resistance near multi-year highs. Gold and silver are searching for support after their rout, with gold eyeing the $2,000 level as a line in the sand. Bitcoin is holding $76,000, but a break lower could trigger another round of liquidations. Ethereum’s $2,200 level is the battleground, lose it, and the next stop is $2,000.

Momentum is positive for equities, but the breadth is narrowing. The rally is being led by large caps, while small caps and cyclicals lag. Crypto volatility is elevated, with options skew favoring downside protection. The dollar’s strength is a headwind for risk assets, but so far, equities are ignoring it. The technicals say “cautious optimism,” but the macro says “watch your back.”

The risks are piling up. A hawkish Fed surprise could derail the equity rally and send the dollar even higher. Commodities could see further downside if inflation expectations fade. Crypto is one headline away from another sentiment shock, especially with regulatory overhangs still unresolved. The market is pricing in perfection, but the setup is fragile.

On the opportunity side, traders are eyeing pullbacks in equities as potential entry points, with stops tight below recent lows. The dollar breakout is a trend to ride, but watch for exhaustion near resistance. Gold and silver are contrarian longs if support holds, but only for the brave. Crypto is a volatility trade, straddles and strangles in the options market could capture the next big move, whichever way it breaks.

Strykr Take

This is a market that rewards agility, not conviction. The cross-asset divergence is both an opportunity and a warning. Don’t trade yesterday’s correlations, adapt to the new regime, where equities, the dollar, and crypto are each marching to their own drummer. The ISM print is a wake-up call that the macro backdrop is changing, and so is the playbook. Stay nimble, respect the technicals, and don’t get married to a single narrative. In this market, the only constant is change.