Market View: Week of Feb. 27, 2026

ECONOMIC REVIEW¹

Over the weekend, after weeks of military buildup and failed diplomatic talks, the United States and Israel launched coordinated air strikes across Iran, targeting nuclear and military infrastructure, prompting swift Iranian retaliation across the region and sharply escalating the risk of a broader Middle East conflict.²

The Producer Price Index (PPI) rose 0.5% in January, above the 0.3% forecast and up from 0.4% in December, marking the strongest monthly gain since September and signaling renewed wholesale inflation pressure.

• On a 12-month basis, headline PPI increased 2.9% with services driving the upside surprise as margins expanded sharply, likely reflecting companies passing through higher tariff-related costs.

Core PPI (Excluding food and energy) surged 0.8% in January, well above the 0.3% estimate and the largest monthly gain since July, pointing to firm underlying inflation pressures beyond volatile categories.

• Core PPI rose 3.6% year-over-year, indicating that inflation at the producer level remains above target.

The Conference Board Consumer Confidence Index rose to 91.2 in February, up from 89.0 in January and above expectations, signaling a modest improvement in overall sentiment.

• The Expectations index climbed 4.8 points to 72.0, the largest gain since July, reflecting improved views on future business conditions, job prospects, and income growth.

• The Present Situation index fell -1.8 points to 120.0 as views on current business conditions softened, even though perceptions of job availability improved.

• The share of consumers saying jobs are “plentiful” rose to 28%, while 20.6% said jobs are “hard to get,” widening the labor market differential to +7.4 percentage points, a key measure of job market confidence.

How does the most recent economic data impact you?

January’s stronger-than-expected wholesale inflation suggests interest rates may stay higher for longer, which can create some near-term market volatility. However, it was encouraging to see final demand food prices decline, a sign that some everyday cost pressures are easing even as broader inflation remains.

Rising confidence, especially around future job and income prospects, supports the case that consumers may continue spending, which is constructive for economic growth. However, sentiment remains below late 2024 highs, and concerns about prices and affordability remain top of mind for households.

Stronger wholesale inflation, alongside improving consumer confidence, paints a mixed but resilient picture. Price pressures remain firm, yet households are feeling somewhat better about jobs and income, suggesting the economy is still expanding but likely keeping the Fed cautious and market sensitive to incoming inflation data.

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A LOOK FORWARD¹

This week features ISM Manufacturing and Services, Retail Sales, ADP employment, and the Employment report.

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

Together, these releases will help clarify whether economic growth is reaccelerating or moderating, and whether the Fed has room to remain patient or may need to adjust its policy outlook.

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MARKET UPDATE³

Market Index Returns as of 2/27/26	WTD	QTD	YTD	1 YR	3 YR	5 YR
S&P 500	-0.42	0.68	0.68	16.99	21.8	14.19
NASDAQ	-0.94	-2.39	-2.39	21.04	26.44	12.26
Dow Jones Industrial Average	-1.28	2.12	2.12	13.59	16.61	11.74
Russell Mid-Cap	0.23	6.99	6.99	16.82	14.82	9.02
Russell 2000 (Small Cap)	-1.15	6.2	6.2	23.34	13.13	5.05
MSCI EAFE (International)	1.24	10.09	10.09	34.63	18.77	10.78
MSCI Emerging Markets	2.82	14.83	14.83	49.96	21.52	6.31
Bloomberg US Agg Bond	0.54	1.75	1.75	6.26	5.12	0.42
Bloomberg High Yield Corp.	-0.22	0.69	0.69	7.18	9.42	4.51
Bloomberg Global Agg	0.5	2.06	2.06	8.23	4.74	-1.23

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OBSERVATIONS

• Major US large-cap indices finished lower on the week, with the S&P 500 down -0.42%, the NASDAQ composite falling -0.94%, and the Dow Jones Industrial Average declining -1.28%.

• Mid-cap stocks outperformed, posting a modest gain of +0.23%, while small caps lagged with the Russell 2000 down -1.15%.

• International equities outperformed US markets for the week, with developed markets (MSCI EAFE) up +1.24% and emerging markets (MSCI EM) advancing +2.82%.

• Fixed income markets were broadly positive despite equity volatility, as the Bloomberg US Aggregate Bond Index rose + 0.54%.

• High-yield corporates were slightly negative, down -0.22%, while global bonds gained +0.50% for the week.

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BY THE NUMBERS

Strikes on Iran Continued:
US and Israeli strikes on Iran intensified over the weekend following the collapse of diplomatic talks, with widespread targets hit in Tehran and retaliation against US bases and regional infrastructure. Markets reacted quickly, with stock futures moving lower, while oil prices surged sharply higher as investors assessed the risk of broader regional conflict. Energy markets are particularly focused on potential disruptions in the Strait of Hormuz, a critical artery for global oil flows, as tanker traffic and security concerns escalate. While markets have often brushed aside geopolitical flare-ups in recent years, this episode comes at a more sensitive time, given ongoing inflation concerns and the market's exposure to globally linked sectors. If energy prices remain elevated, the ripple effects could pressure consumers, complicate central bank policy, and weigh on broader economic momentum beyond the initial shock.⁴

Six Planet Alignment Lights Up Night Sky:
On February 28th, 2026, a rare planetary parade appeared in the evening sky. Featuring six planets, Mercury, Venus, Jupiter, Saturn, Uranus, and Neptune aligned above the horizon shortly after sunset. Four of them, Mercury, Venus, Jupiter, and Saturn, were invisible to the naked eye, while two, Uranus and Neptune, required binoculars or a telescope because of their faintness. The optimal viewing window was roughly 20 to 30 minutes after sunset, before the lower planets dipped below the western horizon. The event included six of the seven major planets, with Mars not part of the alignment, making it smaller than the seven planet parade seen in February of last year. Alignments involving six or more planets occur only every few decades, making this a relatively uncommon celestial event.⁵