Market View: Week of Feb. 20, 2026

ECONOMIC REVIEW¹

Last week the Supreme Court ruled 6-3 that tariffs imposed by the Trump Administration under the International Emergency Economic Powers Act (IEEPA) were not valid.

• The Court did not address the issue of refunds, which will likely be handled by lower courts. It is estimated that these tariffs have raised between $133 and $175 billion, a large portion of which could potentially be returned.

In response to the decision, President Trump over the weekend announced a 15% global tariff using a different legal authority under Sec. 122 of the Trade Act of 1974.

• The administration still has other tools available to re-impose the tariffs ruled illegal, although some are temporary or require a more detailed process.

• Overall, while the path forward will change, it appears likely that tariffs will remain part of the policy landscape, though potentially with less flexibility as a geopolitical negotiating tool.

The first estimate of the fourth quarter Gross Domestic Product (GDP) came in below expectations, rising at a 1.4% annualized rate.

• While consumer spending and business investment remained solid during the quarter, the government shutdown weighed on overall growth, which is expected to reverse and rebound in first-quarter GDP.

The Personal Consumption Expenditures (PCE) index rose 0.4% in December and 2.9% year over year (YoY)

• Core PCE, which excludes volatile food and energy categories, rose 0.4% in December and 3.0% YoY.

Building permits came in above expectations and rose 4.3% in December to an annualized rate of 1.448 million.

• Building permits for multi-family housing jumped over 18% while single-family permits declined 1.7%.

Housing starts moved up 6.2% in December to an annualized rate of 1.404 million, its highest reading since July.

How does the most recent economic data impact you?

The Supreme Court's ruling temporarily reduced the average U.S. effective tariff rate from 13.6% to 6.5%, but the administration's plan to impose new global tariffs under Section 122 is expected to lift it back to roughly 14.4%, reinforcing ongoing trade uncertainty and limiting meaningful relief for businesses and consumers.

Despite the lower headline figure due to the government shutdown, GDP growth was largely in line with expectations and continued to reflect underlying economic momentum.

The PCE report showed that the Federal Reserve will likely remain patient rather than shift policy aggressively, with rate cut expectations not expected until the second half of the year.

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A LOOK FORWARD¹

This week, investors will be closely watching the Producer Price Index (PPI) report for January along with consumer confidence data.

How does this week’s slate of economic data impact you?

Investors will be looking for signs of whether inflation pressures are easing at the wholesale level after last month’s volatile reading, as well as whether consumer sentiment shows signs of improvement.

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MARKET UPDATE²

Market Index Returns as of 2/20/26	WTD	QTD	YTD	1 YR	3 YR	5 YR
S&P 500	1.11%	1.11%	1.11%	16.37%	21.71%	13.73%
NASDAQ	1.53%	-1.47%	-1.47%	17.97%	26.71%	11.34%
Dow Jones Industrial Average	0.29%	3.44%	3.44%	16.21%	16.57%	11.64%
Russell Mid-Cap	1.00%	6.74%	6.74%	16.04%	14.57%	8.38%
Russell 2000 (Small Cap)	0.67%	7.44%	7.44%	22.97%	13.76%	4.68%
MSCI EAFE (International)	0.86%	8.74%	8.74%	31.90%	17.67%	9.89%
MSCI Emerging Markets	0.79%	11.68%	11.68%	39.56%	19.14%	4.35%
Bloomberg US Agg Bond	-0.08%	1.20%	1.20%	7.02%	5.02%	0.24%
Bloomberg High Yield Corp.	0.18%	0.92%	0.92%	7.85%	9.92%	4.43%
Bloomberg Global Agg	-0.17%	1.56%	1.56%	8.13%	4.41%	-1.46%

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OBSERVATIONS

Major U.S. large-cap indices finished higher on the week, as a rebound in large-cap tech lifted broader benchmarks.

• The Nasdaq led for the week (+1.53%), followed by the S&P 500 (+1.11%), and the Dow Jones (+0.29%).

Small-cap (+0.67%) and mid-cap (+1.00%) stocks finished positive for the week as well but trailed their large-cap counterparts.

International markets also posted positive returns on the week. Developed markets rose +0.86% while emerging markets finished slightly behind and posted a return of +0.79%.

Domestic and international fixed income indices were mixed for the week as interest rates rose slightly. The U.S. Aggregate Bond Index dipped -0.08% while high-yield corporate bonds advanced +0.18%.

• International bonds also experienced lower returns for the week and finished down -0.17%.

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BY THE NUMBERS

Miracle in Milan: Team USA Beats Canada in Overtime for Men’s Hockey Gold:
The U.S. men's hockey team defeated Canada 2-1 in the gold medal game at the 2026 Milan Cortina Olympics on Sunday, which marked the 46th anniversary of the "Miracle on Ice." Jack Hughes scored the overtime win for Team USA in 3-on-3 play to clinch the gold. Team USA now has three Olympic gold medals in men's hockey and its first since pulling off a miracle at the 1980 Winter Games. This is the team's first gold off home ice, as it won its first Olympic title at the 1960 Squaw Valley Olympics and its second 20 years later in Lake Placid. On the other side, Canada was chasing its 10th Olympic gold but instead settled for its fifth silver. The country was going for its first gold since 2014; the last year NHL players were allowed to play in the Winter Olympics prior to the Milan Cortina Games.³

Blizzard Warnings Cascade Across East Coast with Winter Storm’s Approach:
Snow and rain began falling Sunday across parts of the East Coast, the first jabs of an intense winter storm expected to wallop the region through the day and overnight, with blizzard alerts and weather warnings buzzing in communities from Maryland to Massachusetts. The National Weather Service said 1 to 2 feet of snow was possible in many areas, along with heavy winds and potential flooding in certain spots. Blizzard warnings have been issued by the weather service in New York City and Long Island, Boston and coastal communities in New Jersey, Connecticut, Delaware, Maryland, Rhode Island and Massachusetts. Emergency declarations were issued in New York and New Jersey ahead of the storm, as officials mobilized readiness efforts. The weather service warned that the storm, with gusts up to 55mph, could cause whiteout conditions that “will make travel treacherous and potentially life-threatening.⁴