Weekend Update, February 23rd, 2026

February 23, 2026

Weaker Growth

U.S. Stock Performance – Index and Sector Moves

The S&P 500 rallied +1.1% on the week, to close at 6909.  The rally was led by YTD laggards, large cap growth stocks. The Nasdaq Composite rose +1.42%, benefiting from semiconductor rebounds and rotation themes mid-week. The price weighted Dow 30 gained only +0.2% as industrials and defensive leadership stalled. The small cap, Russell 2000 rose +0.51%, with small caps participating but mixed breadth and lagging late in the week. The S&P 500 is down -0.4% for February but up 0.9% for the year.

Early Friday, the Supreme Court struck down the President’s broad tariffs, buoying investor sentiment for higher 2026 earnings and supporting growth stock equity gains late in the week. President Trump announced a 10% “global tariff” under Sec. 122 shortly after the ruling but raised that to 15% on Saturday, with details not yet clear. This rate would remain in place until late July, followed by longer lasting tariffs under Sec. 301. New research from the New York Fed as others have found that nearly 90% of the economic burden from the 2025 tariffs fell on American firms and consumers, not foreign exporters. Over 12 months the average US tariff rate jumped from 2.6% to 13%. Foreign suppliers barely lowered their prices in response, so higher costs were largely passed through to the US.

The S&P 500 index peaked last October and remains sensitive to geopolitical risk, U.S.–Iran tensions, and inflation and economic growth data. Sector rotation has persisted for 4 months however this is showing signs of waning back to growth over value.  This morning oil is higher at $67 per barrel; gold is up +2% and silver is up over +5%. Bitcoin, however, is down -2%

Communication services had the largest percentage increase of the week, rising +2.3%, followed by +1.7% in consumer discretionary and industrials. Financials and technology stocks rose +1.5% each.

Omnicom Group (OMC) led communication services, jumping +21% on a short squeeze as the company reported revenue above analysts’ mean estimate and unveiled a $5 billion share-repurchase program, including $2.5 billion under an accelerated buyback.

The global positioning company Garmin (GRMN) shares led consumer discretionary stocks as the company reported EPS above analysts’ expectations. Garmin also forecasts 2026 EPS and revenue above Street views. Shares rose +16%.Deere (DE) was the best industrial, rising +9.9% as the company reported fiscal Q1 earnings per share and net sales above analysts’ mean estimates.

On the downside, YTD leading sectors consumer staples fell -2.3%, followed by a -0.6% decline in health care and a -0.5% loss in utilities. Walmart (WMT) was the hardest-hit stocks in consumer staple, falling -8.1%. EPS and revenue slightly surpassed analysts’ mean estimates, but its guidance for fiscal Q1 and fiscal 2027 adjusted EPS came in below Street views. Walmart stock trades at a historically high of 43x PE.

Per Goldman Sachs global sector returns last week and YTD by Country:

Exhibit 3: MSCI AC World sector performance.

YTD Absolute performance (%) in USD).

Economic Data, Monetary Policy & Earnings

Preliminary 4q25 GDP Data grew +1.4% annualized, below expectations, due to lingering effects from the government shutdown and import data adjustments due to seasonal tariff re-ordering.

U.S. PMI data showed business activity expansion but at slowest pace in months, suggesting economic cooling. Real-time real-interest rates have reflected slow growth since late December.

The 10-yr Treasury yield rose modestly on data and hawkish FOMC minutes. Inflation expectations have moved up in the near term. One-year breakeven rates are now 3.55%. This is the highest reading since March/April of 2025, which was peak tariff time. Two-year breakeven rates are 2.74%, and Five-year breakeven rates are 2.46%. These numbers represent bond market pricing of annualized inflation expected in the coming one, two and five years. The shorter-term inflation components of Treasury yields look to be peaking near 3.6% at their usual seasonal peak.

The U-3 unemployment rate for January was 4.3%, just off the recent high of 4.5% in November 2025 which was the highest level going back to October of 2021.

Earnings reports this week include Nvidia (NVDA, AI and demand signals), Salesforce (CRM, Enterprise software demand and SAAS being AI disrupted), Workday (WDAY), HP (HPQ), Snowflake (SNOW). Lowes (LOW) and Home Depot (HD), Baidu (BIDU), Constellation Energy (CEG), Berkshire Hathaway (BRK.A, BRK.B).and Intuit (INTU, SMID business spending and tax filing demand).

Commodities, Currencies & Macro Assets

Commodities (Weekly & YTD)

  • Oil (WTI): Rose to $66.5/bbl. +5.8% on elevated geopolitical risks pricing in supply risk.
  • Gold: Small gain back over $5,075/oz +0.84% amid safe-haven demand.
  • Silver: Strong gains over $82/oz
  • Copper: %5.84 and -5% off $6.25 late January high
  • Natural Gas: Back to $3.05, –6%, reflecting seasonal patterns.

Bitcoin: $68,000, down over -45% from peak, trying to trough

Currencies

  • DXY (Dollar Index): Flat and stuck since last April at $98 on hawkish Fed minutes
  • USD/JPY: Yen strengthening on flight to safety bid.

OHFG Stock Talk

Stock Market Rotation Nation – Look Before you Leap

Performance per Seeking Alpha:

US Equities, US Equity Sectors, US Equity Factors, and Global Equities.

Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.