Market Wrap-up and What’s to come in March
A short month with a long update, as there is much to report!
February 2026 brought some market volatility, with a pause in high-flying AI and growth stocks while the Dow posted a modest gain. Investors have been recalibrating expectations around the Federal Reserve’s next moves, and eager to see outcomes in the month ahead.
More updates on the markets, economic data, and global news below.
Market Update: February
- The S&P 500 declined about 0.76% in February, its weakest monthly performance since March 2025, as investors rotated away from higher‑growth areas.
- The Nasdaq Composite fell roughly 3.3% for the month, with volatility in mega‑cap technology and AI‑exposed names.
- The Dow Jones Industrial Average had a gain of about 0.2%, extending its winning streak to a tenth consecutive month despite late‑month weakness.
Economic Data: Rates, Inflation, Labor Market
- The Federal Reserve kept its policy rate unchanged at the January meeting (3.5% – 3.75%), maintaining a cautious stance and signaling that additional cuts would likely be data‑dependent.
- Meeting minutes from Mid‑February showed officials divided on the timing of further easing, with some favoring a pause given inflation near 3% on the Fed’s preferred PCE measure.
- Inflation remained somewhat elevated, with core measures near multi‑year lows but still above the Fed’s 2% target.
- Labor market indicators pointed to modest job growth and a stabilization in the unemployment rate.
Corporate Earnings and Sector Highlights:
- Ongoing earnings season featured mixed reactions: while many companies reported solid results, guidance in rate‑sensitive and tech‑related industries prompted volatility.
- AI‑linked capital spending and its long‑term profitability remained a focus; notable semiconductor and platform companies experienced renewed scrutiny around large AI investments.
- Sector Highlights:
- Defensive equity sectors, including Utilities and Consumer Staples, outperformed.
- Utilities rose close to double digits, while Consumer Staples gained high‑single digits.
- Energy remained one of the stronger year‑to‑date performers.
- Financial and technology performance lagged.
Geopolitical and Notable Global Developments:
- Geopolitical tensions in the Middle East remained elevated, with markets closely watching developments involving Iran and their implications for global energy supplies and prices.
- Rising geopolitical risk also contributed to higher oil prices and supported traditional safe‑haven assets such as the U.S. dollar and Swiss franc.
- Global equity markets outside the U.S. were mixed, with performance influenced by local economic conditions, currency moves, and sensitivity to commodity prices and geopolitical developments.
Here’s What to Look for in March:
Key events and data releases to watch in include:
- March 16: (Tax Deadline): Deadline for partnerships and S-corporations to file tax returns or request an extension.
- March 31 (Q1 Deadline): Marks the end of the first quarter for businesses.
- March 31 (Medicare): Last day of the Medicare Advantage Open Enrollment Period to change plans.
Reach out to us anytime to discuss recent market developments and ensure your investment strategy remains aligned with your long-term objectives.
Have a great month!
Sources:
https://www.morningstar.com/markets
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All performance referenced is historical and is no guarantee of future results.
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The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
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The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.
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