Market Recap - Friday February 20, 2026
Markets close higher as strong earnings momentum meets tariff uncertainty, sticky inflation, and rising geopolitical risk
Stocks closed mostly higher today, with the S&P 500 and Nasdaq posting solid gains to end a volatile week on a positive note. Big tech led the advance while semiconductor stocks strengthened, though software continued to lag. Financials, logistics, trucking, and industrial metals also outperformed, reflecting continued rotation into economically sensitive areas. Energy stocks, defense names, and parts of healthcare trailed, while small caps finished roughly flat.
Treasury yields were little changed, the dollar edged lower, and precious metals surged, with gold rising 1.7% and silver jumping over 6%. Oil finished nearly flat despite ongoing Middle East tensions, suggesting markets are still cautious about pricing in geopolitical risk.
Markets digested a heavy mix of macro data and policy developments. The Supreme Court struck down the administration’s emergency tariff authority, but new tariffs are already planned under different legal channels, creating fresh trade-policy uncertainty. Meanwhile, geopolitical tensions remained elevated as the U.S. signaled the possibility of limited military action against Iran, though oil prices showed little follow-through after recent gains.
Economic data painted a mixed picture. Growth appears to be slowing modestly, with Q4 GDP coming in below expectations and flash PMI readings slipping to seven-month lows. At the same time, inflation pressures remain sticky: core PCE rose more than expected, and input costs are rising again. Consumer spending held steady, and new home sales surprised to the upside, but sentiment remains subdued.
AI remained a central market theme. Reports that NVIDIA may invest $30B into OpenAI reinforced the scale of AI infrastructure spending, even as outages at AWS and financing challenges for data-center projects raised questions about execution risks. Software stocks continued to struggle amid AI disruption concerns, while hyperscaler capex scrutiny remains a key investor focus ahead of next week’s NVIDIA earnings.
Despite the noise, earnings and macro surprises continue to lean positive overall. Retail investor participation remains strong, tax refunds are running ahead of last year, and corporate earnings growth is tracking above expectations - factors helping support equities even amid policy uncertainty and geopolitical risk.
Here’s Our Take
This week captured the market’s current reality: strong fundamentals colliding with rising uncertainty. Growth is slowing but not breaking. Inflation remains sticky. AI spending is accelerating. Geopolitics and trade policy are injecting volatility.
Markets are not trending in a straight line - they are rotating, repricing risk, and adjusting to a world of higher rates, massive AI investment, and renewed geopolitical tension.
For investors, the message is clear: the bull case remains intact, but the margin for error is narrowing. Next week’s NVIDIA earnings, inflation signals, and geopolitical developments could determine whether markets regain momentum - or enter a period of consolidation.
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