Markets In Focus: The Week That Was and What’s On Tap Week-Ending 2/20/2026
The Week That Was
In the holiday-shortened week ending February 20, 2026—with markets closed Monday for Presidents’ Day—U.S. equities posted solid gains amid broadening participation and policy relief. The S&P 500 advanced approximately 1.1% for the week, closing near 6,900 levels after Friday’s 0.7% rise. The Nasdaq Composite snapped a five-week losing streak, gaining 1.5% overall with a strong 0.9% Friday finish. Small caps gained 0.9%, selling off on Friday on the stronger PCE inflation numbers, putting any imminent rate cuts by the Fed in doubt. The Invesco S&P 500 Equal Weight ETF (RSP) showed positive gains, but underperformed underscoring a slight recovery in some of the oversold Mag & stocks.
Primary drivers included Friday’s PCE report, where core PCE rose to 3.0% YoY—matching some expectations but remaining elevated and above the Fed’s 2% target—reinforcing a “higher for longer” rate outlook and tempering near-term cut hopes. Offsetting this, the Supreme Court’s 6-3 ruling struck down President Trump’s sweeping tariffs imposed under emergency powers (IEEPA), curbing executive overreach, easing trade uncertainty, and potentially enabling refunds—providing meaningful relief to import-sensitive sectors and consumer stocks.
Earnings highlights featured Walmart’s Q4 FY26 release (Thursday), with solid revenue growth, strong e-commerce momentum, and a dividend increase, though a cautious FY27 outlook weighed slightly on shares.
Sector performance showed cyclicals and value areas advancing (e.g., energy and industrials benefiting from rotation), while tech also showed positive results, though the viability of software in the face of an ever improving AI construct still remains a question mark in investor minds.
The Week Ahead
The week ending February 27, 2026, stands out as a critical period for discerning directional cues in U.S. equities, amid a confluence of macro data and high-profile earnings that could either reinforce recent sector rotations or reignite volatility.
Macro Calendar and Inflation Signals
This week’s economic docket is laden with labor and inflation indicators that will test the narrative of sustained but moderating price pressures. Housing metrics, including existing and pending home sales alongside building permits, arrive against a backdrop of subdued activity in the sector. ADP private payrolls and weekly initial jobless claims (recently hovering near 227K) offer early reads on employment resilience post-January’s softer nonfarm print. The centerpiece remains January’s Producer Price Index (PPI), where consensus anticipates headline m/m of approximately 0.2–0.3% and core around 0.3%, with year-over-year figures lingering near 3%—reflecting persistent services inflation and emerging tariff-related goods pressures. Any upside surprise could underscore sticky disinflation challenges, tempering expectations for near-term Fed easing.
Earnings Highlights and Sector Insights
Earnings season intensifies with pivotal reports shaping sentiment in AI, software, and consumer discretionary. NVIDIA’s Wednesday release remains the linchpin for AI momentum; its commentary on data center demand and capex trajectories will heavily influence whether the trade regains footing after recent pullbacks. Salesforce and Snowflake, battered by indiscriminate software sell-offs amid broader AI disruption fears, will draw scrutiny on management calls for forward guidance, enterprise AI adoption rates, competitive moats, and sustainability of spending—key to assessing if the sector’s derating has overshot or if structural headwinds persist. On the consumer front, Home Depot, Lowe’s, and TJX provide vital visibility into household spending trends, particularly as macro data hints at cautious end-market behavior.
DISCLOSURES
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The S&P 500 generally represents performance of 500 large companies listed on exchanges in the U. S. It is one of the most commonly followed equity indices. The Nasdaq Composite Index is a market-weighted index that measures the performance of more than 3,000 common equities listed on the Nasdaq Composite Market. The Russell 2,000 Index is a market-cap weighted index that measures the performance of approximately 2,000 of the smallest companies in the Russell 3,000 Index. The MSCI ACWI captures Large and Mid-Cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. With 2,921 constituents, the index covers approximately 85% of the global investable equity opportunity set. FactSet Research System is a financial data and software company that provides research for Wall Street professionals and individual investors.
