Supreme Court Decision Lifts Market Sentiment
U.S. equity markets posted a welcome recovery last week. The S&P 500 rose 1.1%, the Nasdaq gained 1.5%, and the Dow increased 0.3%, ending a five-week losing streak.
As shown on page 1 of the report, year-to-date performance remains uneven, with the Nasdaq still down 1.5% while international stocks continue to outperform, and the MSCI EAFE Index up more than 8% this year
The primary catalyst was a 6-3 U.S. Supreme Court ruling that struck down broad global tariffs previously imposed under the International Emergency Economic Powers Act. Markets had largely anticipated the outcome, which helped limit volatility. The administration announced a 10% tariff under Section 122 of the Trade Act of 1974, a rate broadly in line with prior levels.
Economic Data Sends Mixed Signals
Despite the equity rebound, economic indicators painted a more cautious picture.
Fourth-quarter GDP expanded at just 1.4% annualized, a sharp slowdown from the prior quarter’s 4.4% pace and below the 2.5% consensus estimate. A prolonged government shutdown weighed on federal spending.
Inflation data added complexity. The Fed’s preferred gauge, the Personal Consumption Expenditures Index, rose 2.9% annually in December, the highest since March 2024. This reading complicates expectations for potential rate cuts.
Oil prices rose nearly 6% last week amid escalating geopolitical tensions, while the 10-year Treasury yield moved modestly higher to 4.08%, remaining below January’s peak.
Bitcoin remained under pressure, trading below $68,000 and down roughly 23% year to date.
International and Sector Trends
International markets continue to show relative strength. Japan’s benchmark surged nearly 6% to a record high following election results that increased expectations of fiscal stimulus and tax relief.
The performance data on page 2 illustrates broad asset class returns, with developed international equities leading year to date, while certain U.S. growth categories lag
Here are three considerations for investors to monitor:
-
Trade Policy Developments Can Shift Sentiment Quickly
The Supreme Court ruling reduced uncertainty around tariffs, demonstrating how policy changes can influence short-term market direction.
-
Growth Is Slowing, Inflation Remains Elevated
Slower GDP growth paired with higher PCE readings may complicate the Federal Reserve’s path forward. Markets will likely remain sensitive to upcoming economic releases.
-
Global Diversification Remains Relevant
With international markets outperforming U.S. benchmarks year to date, broad geographic exposure may help balance domestic volatility.
Final Thoughts
Markets responded positively to reduced trade uncertainty, even as economic data presented a more measured outlook. Slowing growth and elevated inflation suggest that policy decisions in the coming months will remain closely tied to incoming data. Staying diversified and focused on long-term objectives remains central as markets navigate policy shifts and evolving economic conditions.
As Tony Parish shared:
“Markets responded positively as tariff uncertainty moved closer to resolution.”
READ THE FULL REPORT
Disclosure:
This blog post is for informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. All data is as of February 23, 2026. Please consult with a qualified financial professional for personalized advice.
Stocks Rebound as Trade Uncertainty Eases: Week of February 23, 2026
Supreme Court Decision Lifts Market Sentiment
U.S. equity markets posted a welcome recovery last week. The S&P 500 rose 1.1%, the Nasdaq gained 1.5%, and the Dow increased 0.3%, ending a five-week losing streak.
As shown on page 1 of the report, year-to-date performance remains uneven, with the Nasdaq still down 1.5% while international stocks continue to outperform, and the MSCI EAFE Index up more than 8% this year
The primary catalyst was a 6-3 U.S. Supreme Court ruling that struck down broad global tariffs previously imposed under the International Emergency Economic Powers Act. Markets had largely anticipated the outcome, which helped limit volatility. The administration announced a 10% tariff under Section 122 of the Trade Act of 1974, a rate broadly in line with prior levels.
Economic Data Sends Mixed Signals
Despite the equity rebound, economic indicators painted a more cautious picture.
Fourth-quarter GDP expanded at just 1.4% annualized, a sharp slowdown from the prior quarter’s 4.4% pace and below the 2.5% consensus estimate. A prolonged government shutdown weighed on federal spending.
Inflation data added complexity. The Fed’s preferred gauge, the Personal Consumption Expenditures Index, rose 2.9% annually in December, the highest since March 2024. This reading complicates expectations for potential rate cuts.
Oil prices rose nearly 6% last week amid escalating geopolitical tensions, while the 10-year Treasury yield moved modestly higher to 4.08%, remaining below January’s peak.
Bitcoin remained under pressure, trading below $68,000 and down roughly 23% year to date.
International and Sector Trends
International markets continue to show relative strength. Japan’s benchmark surged nearly 6% to a record high following election results that increased expectations of fiscal stimulus and tax relief.
The performance data on page 2 illustrates broad asset class returns, with developed international equities leading year to date, while certain U.S. growth categories lag
Here are three considerations for investors to monitor:
Trade Policy Developments Can Shift Sentiment Quickly
The Supreme Court ruling reduced uncertainty around tariffs, demonstrating how policy changes can influence short-term market direction.
Growth Is Slowing, Inflation Remains Elevated
Slower GDP growth paired with higher PCE readings may complicate the Federal Reserve’s path forward. Markets will likely remain sensitive to upcoming economic releases.
Global Diversification Remains Relevant
With international markets outperforming U.S. benchmarks year to date, broad geographic exposure may help balance domestic volatility.
Final Thoughts
Markets responded positively to reduced trade uncertainty, even as economic data presented a more measured outlook. Slowing growth and elevated inflation suggest that policy decisions in the coming months will remain closely tied to incoming data. Staying diversified and focused on long-term objectives remains central as markets navigate policy shifts and evolving economic conditions.
As Tony Parish shared:
READ THE FULL REPORT
Disclosure:
This blog post is for informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. All data is as of February 23, 2026. Please consult with a qualified financial professional for personalized advice.