Market Commentary

For the week ending 2/27/2026

 

Investors waded through another chaotic week marked by tariff uncertainty, mixed quarterly earnings results, conflicting economic and inflation data and troubling geopolitical risks.

And all that was before the U.S. and Israel launched a coordinated attack on Iran Saturday morning, Feb. 28. While those headlines are currently stressing the markets, the news last week was a little more tempered and allowed the major indices to show the resilience that has been Wall Street’s hallmark throughout its recent history.

Uncertainty about where market sentiment might be heading next left markets jostling from day-to-day last week, and they ended slightly lower. However, underneath the surface various sectors found some winners and losers.

Significantly increased concerns of AI disruptions continued to affect the markets as software stocks, along with various other sectors, have drifted lower for much of February. While that sentiment continued last Monday, it flipped on Tuesday. Software and other select pockets of the market experienced a midweek rally, boosted by the perspective that the market may have overreacted and these stocks are now oversold. Throughout the week we noticed select rotational strengths and weaknesses for various sectors. Near the end of the week the indexes were nearly flat despite the shifting sentiment.

Tariff policy also took center stage following a Supreme Court ruling that struck down broad tariffs that Trump previously imposed under the International Emergency Economic Powers Act (IEEPA). However, President Trump immediately responded by imposing 15% global tariffs under a different legal authority (Section 122). The new tariffs can remain in place for up to 150 days, while the administration researches the potential implementation of tariffs under sections 232 and 301. There is a lot of legal complexity, but in the end, tariffs may wind up close to where they were prior to this ruling.

Last week also included quarterly reports from a number of retailers including Home Depot, Lowe’s and TJ Maxx. Overall, these retailers reported decent quarters, but guidance for the future lacked enthusiasm. Their share prices received mixed responses following the reports. The week concluded with the very significant earnings report from Nvidia, which functions as a critical indicator of the AI-driven market rally. Nvidia delivered another stellar earnings report, topping expectations, while reporting record data center revenue and issuing stronger-than-expected guidance for next quarter. However, the stock fell about 5% in post-earnings trading, due to the market’s lingering concerns about whether hyperscalers can continue to expand upon the massive current levels of capital expenditure in the AI buildout.

Meanwhile, February’s consumer confidence came in better than expected at 91.2 vs consensus 88.0 and January’s reading of 89.0, however the report noted responses still skewed pessimistic, with prices and inflation top of mind. Weekly initial jobless claims came in line with expectations. Weekly continuing claims came in below expectations. This data comes after last week’s jobless claims dropped by the most since November of 2025, pointing to continuing labor market stabilization.

However, not all the economic data was good this week, as one measure of inflation rose more than expected. January headline Producer Price Index (PPI) was up +2.9% year-over-year, above consensus of +2.6%. January core PPI was up +3.6% y/y, well above consensus of +3.0%, and the highest since March of 2025. While this was disappointing news on Friday, PPI tends to be a bit more volatile than other measures of inflation.

As the U.S. and Iran continued nuclear negotiations last week in Geneva, mounting geopolitical tensions drove oil to six-month highs. At the time, mixed headlines suggested the talks were both disappointing and also saw “significant progress”. The U.S. had been pushing for dismantlement of Iran’s three main nuclear sites and transfer of enriched uranium to the US; conditions analysts view as unlikely to be accepted. Escalating tensions in the Middle East reignited fears of oil supply disruptions causing a crude oil spike.

As we monitor the aftermath of the military operation in Iran, our investment team will also be tracking a new wave of employment data as well as February ISM surveys.

For the week, the Dow closed down -1.3% to 48,978. The S&P slipped -0.4% to 6,879 and the Nasdaq fell -1.0% to 22,668.

Oil rose 1% to $67.02/bbl. Gold jumped 3.7% to $5,267/oz. and the yield on the 10-Year Treasury slid to its lowest mark in four months, closing at 3.96%.

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