Weekly Markets & Risk Wrap — Week Ending February 20, 2026

(1) Executive Summary

Global markets finished the week firm but uneven, shaped less by macro data and more by policy headlines, geopolitics, and earnings dispersion. U.S. equities ultimately moved higher into Friday following a U.S. Supreme Court decision striking down key tariffs, though trading throughout the week reflected elevated sensitivity to geopolitical risk and corporate guidance revisions.

Treasury yields moved modestly higher late in the week after earlier stability, volatility remained elevated relative to early‑year lows, and commodities—particularly oil and gold—reacted strongly to Middle East developments and shifting policy expectations.

The broader signal: markets remain resilient, but positioning is increasingly event‑driven rather than momentum‑driven, with investors reacting quickly to policy and geopolitical catalysts.

(2) Markets & Rates This Week (no curve analysis)

Equities & sector dynamics

• U.S. equities closed mixed-to-higher on the week, with all three major indexes rising on Friday after tariff developments improved sentiment.

• Earlier sessions saw declines driven by AI‑related competitive fears and cautious corporate outlooks, highlighting ongoing sector dispersion.

• Energy stocks outperformed alongside rising crude prices, while parts of technology and private‑credit‑linked equities lagged.

• Market breadth remained uneven despite index stability, reinforcing a rotational environment.
  

Volatility

• The CBOE Volatility Index (VIX) rose during the week and traded near 20, signaling a transition from low‑volatility conditions toward a more two‑sided market.
  

Treasury yields (weekly movement only)

• Treasury yields were broadly stable early in the week before edging higher after the tariff ruling, reflecting improved risk sentiment.

• Daily moves remained incremental and headline‑driven rather than trend‑defining.
  

FX, commodities, and crypto

• The U.S. dollar traded mixed, strengthening mid‑week before easing slightly into Friday.

• Oil prices rose to six‑month highs amid escalating U.S.–Iran tensions, with WTI near $66 and Brent above $71.

• Gold advanced alongside geopolitical uncertainty and policy ambiguity.

• Cryptocurrencies moved modestly higher, with Bitcoin trading near recent highs.
  

(3) Policy & Liquidity Signals

Federal Reserve communication

• Dallas Fed President Lorie Logan described policy as “well positioned” for current risks and expressed cautious optimism that inflation pressures will continue easing, while emphasizing persistent uncertainty.

• Minutes context reinforced a central theme: progress toward policy goals may be uneven, supporting a patient stance rather than imminent policy shifts.
  

Liquidity and financial conditions

• Market functioning remained orderly, with no systemic funding stress evident.

• Policymakers discussed potential long‑term adjustments to operating frameworks, including greater reliance on repo‑market signaling mechanisms—an incremental but notable structural discussion.
  

(4) Corporate, Credit & Real‑Economy Signals

Earnings & guidance

• Earnings reactions were highly company‑specific:

  • Walmart beat earnings but issued cautious forward guidance, pressuring shares.

  • Infrastructure and industrial names benefited from AI‑linked capital spending trends.

  • Cybersecurity and technology firms saw sharp declines after weaker outlooks, underscoring valuation sensitivity.
    

Credit markets & stress signals

• Private credit drew attention after liquidity restrictions and asset sales at a major alternative‑asset manager raised transparency concerns, contributing to declines across listed private‑credit firms.

• The episode appeared contained but highlighted investor sensitivity to less‑liquid financing structures.
  

Labor and corporate restructuring headlines

• Layoffs and hiring freezes continued across large firms as companies adjust to AI‑driven efficiency gains and cost discipline initiatives.

• Workforce actions remain selective rather than systemic, consistent with ongoing corporate restructuring rather than broad economic contraction.
  

(5) The Week’s Defining Theme

Policy shocks are replacing macro data as the primary market catalyst.

This week’s dominant drivers were legal, geopolitical, and policy developments—not traditional economic releases. The tariff ruling, Fed messaging nuance, AI disruption narratives, and Middle East tensions collectively drove asset pricing across equities, commodities, and rates.

Markets are increasingly reacting to policy uncertainty and structural change, suggesting a regime where cross‑asset correlations rise temporarily during headline events even as underlying economic conditions remain stable.

(6) What to Watch Next Week (calendar and scenario framing only)

Key focus areas

• Continued Fed commentary shaping expectations around policy patience.

• Follow‑through from the tariff ruling and potential trade-policy responses.

• Energy market reactions to developments in U.S.–Iran relations.

• Ongoing earnings guidance revisions as reporting season winds down.
  

Scenario framing

• Constructive scenario: geopolitical risks stabilize, oil prices consolidate, and earnings dispersion narrows—supportive for broader equity participation.

• Risk scenario: renewed trade escalation or energy shocks lift volatility and reinforce defensive positioning.
  

(7) Call to Action

For the broader macro framework and structural outlook underpinning these weekly developments, review the current Monthly U.S. Economic Report:

Upcoming themes to monitor

• Policy signaling from Federal Reserve officials.

• Corporate guidance revisions tied to AI investment cycles.

• Energy and geopolitical developments influencing inflation expectations and market volatility.
  

(8) Brief Disclaimer

This publication is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. Nothing herein should be construed as a recommendation to buy, sell, or hold any security or adopt any investment strategy. Views reflect market conditions as of the week‑ending date above and are subject to change without notice.