Anna's Markets Recap

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Saturday, 5:17 AM

February 21, 2026

Good morning news friend! Here is a quick recap of what happened in the markets this week. 📰🌟

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Four Days That Shook Wall Street

The S&P 500 gained 1.07% this week. The Nasdaq rose 1.51%. The Dow added a modest 0.25%. A Supreme Court bombshell, a GDP miss, surging oil, and gold above $5,000 made this holiday-shortened week one of the most event-dense of 2026.

Markets were closed Monday for Presidents' Day. Tuesday opened quiet. Wednesday delivered a rally on hawkish Fed minutes and renewed AI optimism. Thursday reversed hard on private credit fears and Iran saber-rattling. Friday exploded higher after the Supreme Court struck down emergency tariffs in a 6-3 ruling. Over 330 S&P 500 stocks rose on the final day alone.

The week's closing marks: S&P 500 at 6,909.51, Nasdaq Composite at 22,886.07, Dow at 49,625.97. The VIX dropped 5.8% on Friday to 19.05, a release valve after Thursday's tension. Year-to-date, the S&P 500 is up just 0.2%. The Nasdaq sits down 2%. The Dow leads at +2%.

The Tariff Ruling Resets the Trade Landscape

The Supreme Court ruled Friday morning that the International Emergency Economic Powers Act does not authorize broad tariffs. Chief Justice Roberts wrote the majority opinion. The 6-3 decision invalidated an estimated $160–175 billion in tariffs collected under IEEPA authority. Section 232 tariffs on steel, aluminum, and autos remain intact.

Markets raced higher. The Nasdaq gained 0.90% on Friday. The S&P 500 rose 0.69%. The Yale Budget Lab estimated the ruling slashes the average effective tariff rate from roughly 17% to about 7%.

A new 10% global tariff was announced under Section 122 of the 1974 Trade Act as a replacement measure. Investors weighed the net positive: lower tariffs boost importers and e-commerce, but the fiscal revenue hole pushes the 10-year Treasury yield up 2 basis points to 4.094% on deficit concerns.

GDP Stumbles but Markets Shrug It Off

The Bureau of Economic Analysis released the Q4 2025 advance GDP estimate on Friday. Real GDP grew just 1.4% annualized — far below the 2.5% consensus and a sharp deceleration from Q3's 4.4% pace. Federal spending plunged 16.6%, the steepest drop in four years, driven by the government shutdown that began in late 2025.

Markets dismissed the miss as a shutdown artifact. Business investment grew a healthy 3.7%, fueled by AI infrastructure spending. Consumer spending rose 2.4%. Full-year 2025 GDP landed at 2.2%, down from 2.8% in 2024.

The PCE price index, released alongside GDP, showed core inflation at 3.0% year-over-year and headline at 2.9%. Both accelerated from the prior quarter. Weekly jobless claims fell to 206,000 — a five-week low and well below the 223,000 estimate. The Philadelphia Fed Manufacturing Index hit 16.3, its highest reading since September.

The Fed's Internal Split Widens

Wednesday's release of the January FOMC minutes revealed deep divisions. The Fed held rates at 3.50%–3.75%, but two members dissented, pushing for further cuts. Others floated the possibility of rate hikes if inflation persists.

The key phrase: participants judged that the risk of inflation running "persistently above" the 2% target "was meaningful." Markets now price two 25-basis-point cuts by year-end, with the first not expected before June. The 10-year yield traded in a tight range all week, from 4.058% on Tuesday to 4.094% on Friday.

The final University of Michigan consumer sentiment reading for February came in at 56.6, revised down from the 57.3 preliminary figure. Year-ahead inflation expectations fell to 3.5% from 4.0% in January. Long-run expectations ticked up to 3.4%.

Technology & Growth

The Magnificent Seven remain collectively down 6–9% year-to-date. Energy stocks are up 21.5%. Materials gained 17.6%. Industrials are outperforming. The broadening trade — capital flowing out of mega-cap tech and into value sectors — defined 2026's first seven weeks.

Alphabet was the week's standout performer among mega-caps. GOOG surged 4.0% on Friday alone to close at $315.59. Google Cloud's 48% year-over-year revenue growth, the fastest in the group, keeps it at the center of AI infrastructure spending. The stock trades at a reasonable 29.7x forward earnings.

Meta rose to $660.13, up roughly 2.4% on the week. It remains the cheapest Magnificent Seven stock at about 22x forward earnings, with Q4 revenue growth of 24% and Q1 guidance calling for 26–34% acceleration. AI-driven ad targeting is producing direct revenue returns, unlike peers whose AI capex generates uncertain future payoffs.

Amazon climbed to $209.08 on Friday, a 2.1% gain. The week's headline: Amazon surpassed Walmart as the world's largest company by revenue for the first time — $716.9 billion versus $713.2 billion. AWS grew 24% in Q4, its fastest pace in 13 quarters. But the stock remains down roughly 14% year-to-date as investors digest its $200 billion 2026 capex plan.

Apple traded near $264.75 on Friday, up about 3.5% from the prior Friday's $255.78 close. A March 4 product event focused on AI capabilities and Siri upgrades drove anticipation. Wedbush reiterated an Outperform rating with a $350 price target. Apple's $13 billion capex budget — the lowest among mega-caps — is becoming a relative strength as AI spending skepticism grows.

NVIDIA edged to $189.37 on Friday, up less than 1% on the day. The stock is in a holding pattern ahead of its February 25 earnings report, the most anticipated of the quarter. Analysts expect revenue guidance near $65 billion for the next quarter. Late Friday, CNBC reported NVIDIA is in talks to invest up to $30 billion in OpenAI. The stock trades at 26.7x forward earnings, cheap by its historical standard.

Microsoft closed at $399.31 — below $400 and down roughly 17% year-to-date. It is the worst-performing Magnificent Seven name. Azure's 38–39% constant-currency growth in Q2 disappointed investors who expected 50%-plus. The company's annualized capex pace of $144 billion is the highest in the group, with unclear near-term AI returns.

Tesla ended the week near $411.75, the only mega-cap to decline on Friday. It trades at approximately 382x earnings. Automotive revenue growth is modest. The stock's valuation rests on robotaxi and Optimus robot promises that have yet to generate material revenue. Morgan Stanley's price target sits at $415, almost exactly where the stock is.

Broadcom rallied to roughly $335, up 3–4% for the week. The chip designer carries a $73 billion AI-related backlog. CEO Hock Tan called bookings "unprecedented." Q1 earnings, due around March 4, are expected to show AI semiconductor revenue doubling to $8.2 billion. UBS holds a Buy rating with a $475 target.

Salesforce hovers near $185–190, down almost 19% from recent levels. It is caught in the "SaaSpocalypse" — a sector-wide sell-off triggered by Anthropic's enterprise plugins launch on January 30, which raised fears that AI agents will compress SaaS seat counts. Salesforce reports Q4 earnings on February 25 alongside NVIDIA. Oppenheimer, Stifel, and Mizuho all maintain Buy ratings with targets between $280 and $300.

Netflix trades near $77–78, close to its 52-week low of $75.23. The pending $82.7 billion acquisition of Warner Bros. studios, HBO, and HBO Max dominates the narrative. Activist investor Ancora Holdings opposes the deal and is pushing for a competing Paramount Skydance bid. The WBD shareholder vote is scheduled for March 20.

Financial Institutions

Berkshire Hathaway filed its Q4 2025 13F on Tuesday, revealing a $274.16 billion portfolio across 42 holdings. The headline: a new position in The New York Times. Berkshire continued trimming Apple, its largest holding at 22.6% of the portfolio ($60.7 billion). It also cut Amazon and kept selling Bank of America, a position it has reduced steadily since July 2024.

BRK.B shares drifted lower to about $497, down 0.6% for the week. Greg Abel took over as CEO on January 1. The company's cash pile exceeded $381 billion at the end of Q3, with Q4 figures expected to top $400 billion.

JPMorgan traded down to the $308–310 area from $312. The bank announced plans to open 160-plus new Chase branches across 30 states in 2026. The ECB fined its European arm €12.18 million. An insider sale of 50,000 shares by CIB co-CEO Troy Rohrbaugh on February 19 raised eyebrows.

Visa and Mastercard both edged higher. Visa traded near $317–319; Mastercard held around $528. Both sit well below their 52-week highs — Visa down 14%, Mastercard down 12%. A proposed 10% cap on credit card interest rates remains the largest regulatory overhang. Analysts estimate it could hit pre-tax earnings by 18% for major card issuers.

Bank of America slipped to $52.77. The bank launched a no-fee loyalty rewards program on February 18, opening eligibility to 30 million-plus clients. Berkshire's continued selling pressures the stock. CEO Brian Moynihan's February 10 comments that consumer spending grew 5% year-over-year in January provided a positive counter-narrative to slowdown fears.

Consumer Staples & Healthcare

Walmart reported Q4 FY26 earnings before the bell on Thursday. Adjusted EPS came in at $0.74, a penny above consensus. Revenue hit $190.66 billion, up 5.6% year-over-year. U.S. comparable sales grew 4.6%. E-commerce surged 27%. The Walmart Connect advertising business grew 41%.

The stock cratered. It fell 1.4% on Thursday to $124.87 and slid further Friday toward $121. The culprit: FY2027 EPS guidance of $2.75–2.85 versus Wall Street's $2.96 estimate. HSBC downgraded the stock to Hold.

CEO John Furner, in his first earnings call after taking over February 1, described a "K-shaped" consumer. Higher-income households are driving Walmart's market share gains. Lower-income shoppers remain "stretched." The company authorized a $30 billion buyback — a record — but it did not stop the selling. From its all-time high of $133.89 on February 13, Walmart shed roughly 9% by Friday.

Eli Lilly traded in a range around $1,020–1,045, down modestly from its $1,040 prior-week close. The company's oral GLP-1 pill, orforglipron, is under FDA expedited review after receiving a Commissioner's National Priority Review Voucher. Lilly also announced a $1 billion AI investment to reshape drug discovery. Barclays named it the preferred large-cap biopharma pick on February 18.

AbbVie was the healthcare winner, rallying 3–4% to around $231. Skyrizi and Rinvoq combined for $26 billion in 2025 sales, up 40% year-over-year, with guidance for over $31 billion in 2026. Piper Sandler raised its price target to $299 on February 18. Barclays initiated coverage with an Overweight rating and a $275 target on February 19. Legal settlements extended Rinvoq exclusivity through 2037.

Johnson & Johnson touched an all-time high of $246.35 on February 12 before pulling back to the low $240s. The FDA granted Breakthrough Therapy Designation for RYBREVANT FASPRO in advanced head and neck cancer on February 18. J&J also announced a $1 billion-plus investment in cell therapy manufacturing. On the downside, the company lost a talc trial on February 13 with 67,000-plus lawsuits still pending.

UnitedHealth Group stabilized near $290, up slightly for the week. The stock remains down over 50% from its November 2024 peak after a January earnings report that sent shares tumbling 16–20% in a single session. CMS proposed a minimal 0.09% Medicare Advantage rate increase for FY2027 versus mid-single-digit expectations. Multiple analysts cut targets but maintain Buy ratings, with an average target near $375–388.

Costco declined 2–3% to the $987–1,000 range. A salmonella lawsuit related to rotisserie chicken weighed on the stock. January net sales rose 9.3% year-over-year, and digitally enabled comparable sales jumped 34.4%. Valuation remains the concern: the stock trades at a steep premium.

Procter & Gamble was flat near $158.43. The company presented at the CAGNY conference. Wells Fargo raised its target to $177. Insider selling by senior executives drew attention.

Energy & Industrial

Crude oil posted its strongest weekly gain in months. WTI jumped 6.5% from $62.33 on Tuesday to $66.39 on Friday. Brent surged 8.7% from roughly $66 to $71.76, hitting a six-month high. Brent peaked intraday at $72.09 on Thursday.

The catalyst was the U.S.-Iran nuclear confrontation. Two carrier strike groups moved into the Persian Gulf. Iran conducted joint naval drills with Russia near the Strait of Hormuz, which handles 20% of global oil supply. Capital Economics warned oil could reach $100 per barrel if Iran's energy infrastructure is struck.

EIA data showed U.S. crude inventories fell 9 million barrels in the week ending February 13, tightening supply. OPEC+ confirmed it will maintain production pauses through Q1 2026, with the next meeting scheduled for March 1.

Exxon Mobil rallied 3.07% on Wednesday alone, closing at $150.68, its strongest single-day move in weeks. It finished the week near $150.76, up 1.6%. Exxon is responsible for over 7 percentage points of the energy sector's 21% year-to-date return. The company reaffirmed its commitment to fast-tracking gas development in Guyana.

Gold breached $5,000 per ounce this week. Spot gold climbed from roughly $4,896 on Tuesday to $5,040 on Friday — a 2.9% gain. Intraday prints reached $5,070. Central bank buying, led by the People's Bank of China in its 15th consecutive month of accumulation, underpins structural demand. Goldman Sachs raised its December 2026 target to $5,400. JPMorgan's boldest call: $6,300 by year-end.

Home Depot slipped about 1% to $379 ahead of its Q4 earnings report on February 24. RBC Capital lowered its price target to $363 with a Hold rating. The housing market remains soft: mortgage rates near 6%, pending home sales fell 0.8% in January, and consumer spending on home improvement is constrained. Analysts expect Q4 EPS of $2.53 on revenue of $38.14 billion.

What to Watch Next Week

February 25 is the single most important earnings day of the season. NVIDIA and Salesforce both report. NVIDIA's guidance will set the tone for every AI-exposed stock. Home Depot reports on February 24. The WBD acquisition drama — with Paramount Skydance's competing offer window closing February 23 — will drive Netflix and media stocks. Apple's annual shareholder meeting on February 24 and its March 4 product event keep that name in focus.

The 10-year Treasury yield finished the week at 4.094%, up 3.6 basis points. The spread between the FOMC's internal hawks and doves is widening. The new 10% global tariff adds a fresh variable. The labor market remains firm. Inflation is sticky. And gold at $5,000 signals that institutional capital is hedging against uncertainty on every front.

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Baked with love,

Anna Eisenberg ❤️