AE Wealth Management: Weekly Market Insights | 2/22/26 – 2/28/26
Weekly Market Commentary
THE WEEK IN REVIEW: Feb. 22-28, 2026
Markets had another rough week
The fallout from the Supreme Court’s Feb. 13 decision about the president’s use of tariffs under the International Emergency Economic Powers Act (IEEPA) and continued AI worries took a bite out of markets last Monday. And things didn’t get much better the rest of the week.
Unlike last April, we didn’t see a prolonged violent sell-off. That’s because the president immediately announced new tariffs under a different authority — so not much has changed for the moment.1 That said, the increased uncertainty surrounding tariff policy won’t be a benefit for the market going forward.
Let’s be clear on several points. First, Trump views tariffs as a viable policy tool and is committed to using them as ongoing leverage. Second, it is unclear how durable Trump’s tariffs will be. He will ultimately need Congressional approval, which seems unlikely in today’s hyper-politicized environment. And finally, future presidents may choose to undo any tariffs Trump imposes when they negotiate their own trade deals. If we thought the hysteria we experienced last spring around tariffs was behind us, we were wrong. The tariffs will most likely be a continuous source of volatility for the next couple of years.
The market’s reaction was better this time; after a nasty sell-off on Monday, it recovered for the most part and even advanced before falling on news from two recently familiar themes: overpriced AI and tech stocks (Thursday) and inflation fears (Friday).
Nvidia earnings beat fourth-quarter estimates, with both revenue and earnings surprising to the upside, but that didn’t satisfy the market.2 Chip stocks also stumbled along with Nvidia.3 Then a surprisingly hot producer price index (PPI) number on Friday sent the markets diving for cover as the same fears about the Federal Reserve delaying cuts in the months ahead resurfaced (more in the next section).4
It was a tough week to endure, but right now the market is stalled, waiting for the next big event to react to — either to march forward or fold and retreat. You’ll notice we run up to near records and retreat, but no one is heading for the exits. We’ve been sitting in a pretty narrow range on the S&P 500 and Dow Jones, so traders aren’t cashing out, but the tension can wear on investors.5,6 Our advice is to stay grounded and avoid the temptation to “do something.” Be patient, focused and vigilant while we wait for the winds to shift and move forward from where we are now.
Inflation remains stubborn
The PPI for January came in surprisingly higher, reigniting fears that inflation remains stubborn and fueling concerns that the Fed will continue to keep rates where they are.7 Markets didn’t like that.8
Consensus was calling for PPI to be 2.8% year-over-year, but it came in at 2.9%. As a reminder, the PPI provides significant information earlier in the production process. Why is that important? PPI is considered a precursor of both consumer price inflation and profits. If the prices paid to producers increase, businesses are faced with either charging higher prices or taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace.
The culprit adding to an over-20% increase from the prior month’s reading was a spike in margins for machinery and equipment wholesaling, which rose 14.4%. Many likely assumed it would be goods prices leading inflation higher, given the higher tariff rates President Trump implemented, but goods prices declined 0.3% in January.
Be careful as you listen to people explain this increase. Many want to blame tariffs for the rise, and as a result, we will either see higher prices (more inflation) or lower earnings (weaker economy and poor stock market performance). But do we expect machinery and equipment to keep rising at this rate month after month, or is this an outlier?
We really don’t see a recession anytime soon as a likely scenario. People are spending and traveling, earnings are better than last quarter and mortgage rates fell below 6% for the first time in four years. Yet consumer confidence is weak because that’s all the media talks about, and you wouldn’t know any different if you venture out into the world. For now, it’s a no-brainer for markets to take a little bit off the table when we get a surprise number and wait for the next catalyst.
Coming this week
- This week could be a wild one, after the U.S. and Israel bombed Iran over the weekend and reportedly killed their supreme leader. The action led to the closure of the Strait of Hormuz, the primary shipping channel for oil. A prolonged closure of the Strait is already resulting in a significant spike for oil and gas prices.9
- Monday will be quiet from a data perspective, with auto sales and ISM manufacturing. Then we’ll hear from Fed speakers starting on Tuesday and through the rest of the week.
- The meaningful data will begin on Wednesday with the latest ADP employment report, the Fed Beige Book and MBA mortgage applications. Thursday will feature weekly unemployment claims.
- Finally, on Friday, we’ll get the Bureau of Labor Statistics (BLS) employment situation for February. Last month, we had a surprising +130,000.10 If we have another strong month, that will give the Fed more reason to delay cuts and will probably send markets down. A weak number could have the opposite effect.
- Earnings season is almost done.11 With 96% of S&P 500 companies reporting actual results as of Feb. 27, 73% reported positive earnings per share (EPS) and revenue. Earnings growth for the S&P 500 in the fourth quarter was 14.2%, up from 11.8% in the third quarter, and marks the fifth consecutive quarter of double-digit earnings growth for the index.
- For the current quarter, 45 S&P 500 companies have issued negative EPS guidance and 52 companies have issued positive. Valuation is still historically high for the S&P 500, with the forward 12-month price-to-earnings (P/E) ratio at 21.6, up from 22.7 in the third quarter. This P/E ratio is higher than the 5-year (20.0) and 10-year (18.8) averages.
Index Performance Returns % | |||||
| 1 WK | YTD | 1YR | 3YRS | 5YRS | |
| S&P 500 | -0.44% | 0.49% | 15.52% | 20.11% | 12.54% |
| NASDAQ | -0.95% | -2.47% | 20.27% | 25.55% | 11.43% |
| DJIA | -1.31% | 1.90% | 11.72% | 14.47% | 9.63% |
Interest Rates: | |||||
| 2/27/2026 | 2/20/2026 | ||||
| UST 10 YR Government Bond Yield | 3.95% | 4.09% | |||
| Germany 10 YR | 2.64% | 2.73% | |||
| Japan 10 YR | 2.11% | 2.12% | |||
| 30 YR Mortgage | 6.04% | 6.24% | |||
| Oil | $67.02/ppb | $66.36/ppb | |||
| Regular Gas | $2.89/ppg | $2.93/ppg | |||
| All data as of Feb. 27, 2026. | |||||
Sources:
1 Kimberly Clausing and Maurice Obstfeld. PIIE. Feb. 23, 2026. “What the Supreme Court’s tariff ruling changes, and what it doesn’t.” https://www.piie.com/blogs/realtime-economics/2026/what-supreme-courts-tariff-ruling-changes-and-what-it-doesnt. Accessed March 1, 2026.
2 NVIDIA. Feb. 25, 2026. “NVIDIA Announces Financial Results for Fourth Quarter and Fiscal 2026.” https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-fourth-quarter-and-fiscal-2026. Accessed March 1, 2026.
3 Rich Asplund. Nasdaq. Feb. 26, 2026. “Stocks Pressured as Chipmakers Tumble.” https://www.nasdaq.com/articles/stocks-pressured-chipmakers-tumble. Accessed March 1, 2026.
4 James Rogers. Investment News. Feb. 27, 2026. “Latest inflation data comes in hotter than expected. Here is what it means for advisors.” https://www.investmentnews.com/equities/the-latest-hot-inflation-data-came-in-higher-than-anticipated-this-is-what-it-means-for-advisors/265468. Accessed March 1, 2026.
5 Yahoo! Finance. “S&P 500 (ˆGSPC).” https://finance.yahoo.com/quote/%5EGSPC/. Accessed March 1, 2026.
6 Yahoo! Finance. “Dow Jones Industrial Average (ˆDJI).” https://finance.yahoo.com/quote/%5EDJI/. Accessed March 1, 2026.
7 U.S. Bureau of Labor Statistics. Feb. 27, 2026. “Producer Price Index News Release summary.” https://www.bls.gov/news.release/ppi.nr0.htm. Accessed March 1, 2026.
8 Sean Conlon and Pia Singh. CNBC. Feb. 27, 2026. “Dow closes more than 500 points lower after hot inflation report, mounting concerns about AI impact.” https://www.cnbc.com/2026/02/26/stock-market-today-live-updates.html. Accessed March 1, 2026.
9 Hugh Leask. CNBC. March 2, 2026. “Oil soars amid Strait of Hormuz shipping fears as Iran war drives prices to nearly $80.” https://www.cnbc.com/2026/03/02/iran-us-oil-strait-hormuz-war-middle-east-energy-brent-crude-wti-conflict.html. Accessed March 2, 2026.
10 U.S. Bureau of Labor Statistics. Feb. 11, 2026. “The Employment Situation — January 2026.” https://www.bls.gov/news.release/pdf/empsit.pdf. Accessed March 1, 2026.
11 John Butters. FactSet. Feb. 27, 2026. “Earnings Insight.” https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_022726.pdf. Accessed March 1, 2026.
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