On February 19, 2026, U.S. stocks moved lower. The S&P 500 was down 0.44%, the Dow Jones Industrial Average fell 0.57%, and the Nasdaq 100 declined 0.66%. The pullback was driven by losses in chipmakers and AI-infrastructure stocks as investors renewed caution about the outlook for artificial intelligence and whether heavy investment in the technology will deliver the expected returns.
Fed Minutes and Rate Expectations
Sentiment also remained pressured by the minutes from the January 27–28 FOMC meeting, which indicated that “several” policymakers suggested the Fed may need to raise interest rates if inflation remains above its target. Markets were pricing roughly a 6% probability of a 25-basis-point rate cut at the next policy meeting on March 17–18.
Geopolitical Risks and Oil
Geopolitical risks added to the risk-off tone. WTI crude oil rose more than 1% to a roughly three-week high following comments from the head of the U.N. nuclear watchdog, who said the U.S. military buildup in the Middle East suggests Iran’s window to reach a diplomatic agreement over its nuclear activities may be at risk of closing.
U.S. Data: Labor, Business Activity, and Trade
U.S. economic releases were mixed. Weekly initial jobless claims fell by 23,000 to 206,000, a five-week low and stronger than expectations for 225,000. The February Philadelphia Fed business outlook index unexpectedly increased by 3.7 points to 16.3, a five-month high, versus forecasts calling for a decline to 7.5. At the same time, the December U.S. trade deficit widened to $70.3 billion, larger than the expected $55.5 billion and the biggest deficit in five months.
Rates and Fixed Income
Treasuries declined as the 10-year yield edged up about 1.7 basis points to 4.10%, reflecting stronger-than-expected labor and regional manufacturing data, hawkish takeaways from the Fed minutes, and rising oil prices that lifted inflation expectations. European yields also moved higher, with Germany’s 10-year bund yield up about 1.4 basis points to 2.753% and the U.K.’s 10-year gilt yield up about 1.6 basis points to 4.390%. In swaps, markets were pricing roughly a 2% chance of a 25-basis-point ECB cut at the March 19 meeting.
Earnings Focus and Key Releases Ahead
Investors remained focused on corporate earnings and upcoming macro data. Friday’s calendar includes the Q4 GDP revision, inflation measures and household spending indicators, PMI readings, and housing-related figures. The Q4 earnings season is nearing its end, with more than three-quarters of S&P 500 companies having reported. About 75% of the 394 companies that have posted results have beaten expectations. Bloomberg Intelligence expects S&P 500 earnings growth of roughly 8.4% year over year in Q4, and about 4.6% excluding the “Magnificent Seven” megacap technology stocks.
Notable Stock Movers
Semiconductor and AI-linked shares were among the biggest drags. Seagate fell more than 3%, while Intel, Micron, Western Digital, Lam Research, Applied Materials, KLA, and Arm dropped more than 2%. Nvidia, Marvell, Palantir, and Qualcomm were down more than 1%. EPAM slid more than 19% after projecting full-year organic constant-currency revenue growth of 3% to 6%, below a consensus near 6.3%. Avis Budget fell more than 18% after forecasting full-year adjusted EBITDA below consensus. Pool Corp dropped more than 13% following a weaker-than-expected quarter and a cautious full-year outlook, while Wayfair declined more than 12% after reporting active customers below expectations. On the upside, Omnicom rose more than 13% after reporting revenue well above consensus. Etsy gained more than 10% after agreeing to sell Depop to eBay for about $1.2 billion. Deere advanced more than 9% after raising its full-year net income forecast, and DoorDash climbed more than 5% after issuing a Q1 marketplace gross order value outlook above consensus.
Fed Minutes and Rate Expectations
Sentiment also remained pressured by the minutes from the January 27–28 FOMC meeting, which indicated that “several” policymakers suggested the Fed may need to raise interest rates if inflation remains above its target. Markets were pricing roughly a 6% probability of a 25-basis-point rate cut at the next policy meeting on March 17–18.
Geopolitical Risks and Oil
Geopolitical risks added to the risk-off tone. WTI crude oil rose more than 1% to a roughly three-week high following comments from the head of the U.N. nuclear watchdog, who said the U.S. military buildup in the Middle East suggests Iran’s window to reach a diplomatic agreement over its nuclear activities may be at risk of closing.
U.S. Data: Labor, Business Activity, and Trade
U.S. economic releases were mixed. Weekly initial jobless claims fell by 23,000 to 206,000, a five-week low and stronger than expectations for 225,000. The February Philadelphia Fed business outlook index unexpectedly increased by 3.7 points to 16.3, a five-month high, versus forecasts calling for a decline to 7.5. At the same time, the December U.S. trade deficit widened to $70.3 billion, larger than the expected $55.5 billion and the biggest deficit in five months.
Rates and Fixed Income
Treasuries declined as the 10-year yield edged up about 1.7 basis points to 4.10%, reflecting stronger-than-expected labor and regional manufacturing data, hawkish takeaways from the Fed minutes, and rising oil prices that lifted inflation expectations. European yields also moved higher, with Germany’s 10-year bund yield up about 1.4 basis points to 2.753% and the U.K.’s 10-year gilt yield up about 1.6 basis points to 4.390%. In swaps, markets were pricing roughly a 2% chance of a 25-basis-point ECB cut at the March 19 meeting.
Earnings Focus and Key Releases Ahead
Investors remained focused on corporate earnings and upcoming macro data. Friday’s calendar includes the Q4 GDP revision, inflation measures and household spending indicators, PMI readings, and housing-related figures. The Q4 earnings season is nearing its end, with more than three-quarters of S&P 500 companies having reported. About 75% of the 394 companies that have posted results have beaten expectations. Bloomberg Intelligence expects S&P 500 earnings growth of roughly 8.4% year over year in Q4, and about 4.6% excluding the “Magnificent Seven” megacap technology stocks.
Notable Stock Movers
Semiconductor and AI-linked shares were among the biggest drags. Seagate fell more than 3%, while Intel, Micron, Western Digital, Lam Research, Applied Materials, KLA, and Arm dropped more than 2%. Nvidia, Marvell, Palantir, and Qualcomm were down more than 1%. EPAM slid more than 19% after projecting full-year organic constant-currency revenue growth of 3% to 6%, below a consensus near 6.3%. Avis Budget fell more than 18% after forecasting full-year adjusted EBITDA below consensus. Pool Corp dropped more than 13% following a weaker-than-expected quarter and a cautious full-year outlook, while Wayfair declined more than 12% after reporting active customers below expectations. On the upside, Omnicom rose more than 13% after reporting revenue well above consensus. Etsy gained more than 10% after agreeing to sell Depop to eBay for about $1.2 billion. Deere advanced more than 9% after raising its full-year net income forecast, and DoorDash climbed more than 5% after issuing a Q1 marketplace gross order value outlook above consensus.
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Twitter: @BigStakeTrades
Twitter: @BigStakeTrades