Weekly Market Pulse - Week ending February 20, 2026
Market developments
Equities: Global equity markets experienced a volatile week dominated by the U.S. Supreme Court decision on Friday to strike down President Trump's sweeping global tariffs. European stocks rallied to an all-time high, with the Stoxx 600 climbing higher, led by luxury goods makers including LVMH and Hermes. U.S. markets also advanced, though Trump pledged to impose a 10% global levy, creating continued uncertainty.
Fixed Income: Treasury yields moved higher through most of the week before experiencing volatility following Friday's tariff ruling. Federal Reserve minutes released Wednesday showed policymakers signaling renewed caution about cutting rates, with "several" officials suggesting the central bank may need to raise rates if inflation remains elevated.
Commodities: Oil prices surged on escalating Middle East tensions, with Brent crude rising to close out the week after adding 4.3% on Wednesday, its biggest daily gain since October. The rally followed reports that a major U.S. military operation targeting Iran could begin soon. Gold remained near $5,000 per ounce throughout the week as major gold miners reported surging profits.
Performance (price return)
SECURITY |
PRICE |
WEEK |
1 MONTH |
3 MONTH |
YTD |
Equities ($Local) |
|
|
|
|
|
S&P/TSX Composite |
33,817.51 |
2.25% |
3.26% |
13.08% |
6.64% |
S&P 500 |
6,909.51 |
1.07% |
1.66% |
5.67% |
0.94% |
NASDAQ |
22,886.07 |
1.51% |
-0.30% |
3.66% |
-1.53% |
DAX |
25,260.69 |
1.39% |
2.26% |
8.51% |
3.15% |
NIKKEI 225 |
56,825.70 |
-0.20% |
7.24% |
14.05% |
12.88% |
Shanghai Composite |
4,082.07 |
0.00% |
-0.77% |
3.84% |
2.85% |
Fixed Income (Performance in %) |
|
|
|
|
|
Canada Aggregate Bond |
244.95 |
0.09% |
1.46% |
1.10% |
1.67% |
US Aggregate Bond |
2377.06 |
-0.08% |
1.51% |
1.63% |
1.20% |
Europe Aggregate Bond |
250.41 |
0.15% |
1.07% |
1.25% |
1.46% |
US High Yield Bond |
29.40 |
0.16% |
0.52% |
2.33% |
0.89% |
Commodities ($USD) |
|
|
|
|
|
Oil |
66.39 |
5.57% |
10.03% |
12.26% |
15.62% |
Gold |
5093.13 |
1.01% |
6.92% |
24.92% |
17.91% |
Copper |
587.20 |
1.19% |
1.02% |
18.18% |
3.34% |
Currencies ($USD) |
|
|
|
|
|
US Dollar Index |
97.71 |
0.82% |
-0.94% |
-2.44% |
-0.62% |
Loonie |
1.3675 |
-0.42% |
1.18% |
3.08% |
0.36% |
Euro |
0.8481 |
-0.65% |
0.57% |
2.29% |
0.39% |
Yen |
154.97 |
-1.46% |
2.05% |
1.61% |
1.12% |
Source: Bloomberg, as of February 20, 2026
Central Bank Interest Rates
Central Bank |
Current Rate |
March 2026 |
Bank of Canada |
2.25% |
2.25% |
U.S. Federal Reserve |
3.75% |
3.63% |
European Central Bank |
2.00% |
1.93% |
Bank of England |
3.75% |
3.53% |
Bank of Japan |
0.75% |
0.76% |
Source: Bloomberg, as of February 20, 2026
*Expected rates are based on bond futures pricing
Macro developments
Canada – Inflation Softens Slightly, Retail Sales Rebound
Canada’s inflation eased to 2.3% in January 2026, slightly below expectations, helped by a steep drop in gasoline prices. Shelter and household costs slowed while food inflation accelerated due to tax base effects, especially in restaurant prices. Core trimmed-mean inflation fell to 2.4%, the lowest since 2021.
Canadian retail sales are estimated to have grown 1.5% in January 2026 after a decline in December. December sales fell 0.4% as motor vehicle dealers dragged results while gasoline stations and sporting goods retailers saw gains. Most provinces posted declines except Quebec. Year over year, retail sales were little changed in December.
U.S. – Softening Momentum in U.S. Business Activity
The U.S. Composite PMI slipped to 52.3 in February 2026, marking the slowest expansion since April 2025 as both manufacturing and services weakened. New orders eased and exports fell sharply while employment grew only slightly for a third month. Input costs rose due to tariffs and labour pressures, and output prices increased at the fastest rate since August. Despite the softer activity, business confidence improved with expectations reaching a 13‑month high.
International – Eurozone Activity Strengthens, Eurozone Activity Strengthens in Japan, Japan Eurozone Activity Strengthens
The Eurozone Composite PMI rose to 51.9 in February 2026, signalling the strongest expansion since November. Manufacturing output accelerated and services grew faster, though new orders increased only slightly and foreign demand weakened. Employment dipped again and backlogs fell. Input cost inflation picked up while output prices rose more slowly. Business confidence slipped but stayed near a two-year high.
Japan’s GDP edged up 0.1% in Q4 2025 after a drop in Q3 but missed expectations. Business investment improved and consumption barely rose due to high food costs. Government spending stayed flat and trade added nothing as both exports and imports fell. Persistent U.S. tariffs and tensions with China continued to weigh on growth, though Tokyo plans more targeted public investment after its election win.
Quick look ahead
DATE |
COUNTRY/REGION |
EVENT |
|
SURVEY |
PRIOR |
23-Feb-26 |
China |
5-Year Loan Prime Rate |
|
3.50 |
3.5 |
23-Feb-26 |
China |
1-Year Loan Prime Rate |
|
3.00 |
3 |
26-Feb-26 |
Japan |
Tokyo CPI YoY |
Feb |
1.40 |
1.5 |
26-Feb-26 |
Japan |
Tokyo CPI Ex-Fresh Food YoY |
Feb |
1.70 |
2 |
26-Feb-26 |
Japan |
Retail Sales MoM |
Jan |
1.50 |
-2 |
26-Feb-26 |
Japan |
Retail Sales YoY |
Jan |
0.10 |
-0.9 |
27-Feb-26 |
United States |
PPI Final Demand MoM |
Jan |
0.30 |
0.5 |
27-Feb-26 |
United States |
PPI Ex Food and Energy MoM |
Jan |
0.30 |
0.7 |
27-Feb-26 |
United States |
PPI Final Demand YoY |
Jan |
|
3 |
27-Feb-26 |
United States |
PPI Ex Food and Energy YoY |
Jan |
|
3.3 |
27-Feb-26 |
Canada |
Quarterly GDP Annualized |
4Q |
-0.35 |
2.6 |
27-Feb-26 |
Canada |
GDP MoM |
Dec |
0.10 |
|
27-Feb-26 |
Canada |
GDP YoY |
Dec |
|
0.6 |
The Asset Allocation Team at NEI Investments
Judith Chan, CFA – Vice President, Head of Asset Allocation
Mateo Marks, CFA – Director, Asset Allocation
Adam Ludwick, CFA – Director, Asset Allocation
Anthony Rago, B.A.Sc. – Senior Asset Allocation Analyst
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This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters. This document is published by AFI and unless indicated otherwise, all views expressed in this document are those of AFI. The views expressed herein are subject to change without notice as markets change over time.