Weekly Market Performance — February 27, 2026

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of February 23, 2026. U.S. stocks fell for the week as concerns about AI’s disruptive impact drove a broader risk‑off shift. Technology and banks weakened, while defensive sectors held up better. International markets were mixed, with Asia outperforming despite global caution around AI. In bonds, falling yields supported core fixed income as investors grew more worried about economic momentum. Commodities strengthened on rising geopolitical tensions and dampened risk appetite, while the U.S. dollar edged slightly lower.

Stock Index Performance

U.S. and International Equities

U.S. Equities: The S&P 500 ended lower on the week because of Friday’s decline after entering today’s session unchanged week to date. Friday’s decline secured a down February for the S&P 500 and the Nasdaq, although the Dow Industrials ended the month little changed. Market participants remained focused on the potential downside of AI in terms of disruption to various business models, most notably — but not exclusively — software. Fears of job losses related to AI, along with renewed — and related — concerns about potential losses in the private equity and credit markets were simply too much for the market to withstand. The major averages rolled over on Friday, led lower by banks and technology. The rally in Treasuries came despite a hot wholesale inflation report, providing evidence of the market’s economic growth concerns.

It didn’t help market sentiment in the technology sector that strong results from NVIDIA (NVDA) on Wednesday were greeted with heavy selling pressure after an initial move higher in after-market trading. Dip buying in beaten-down software names early in the week proved fleeting. Markets continued to exhibit dispersion, with defensive sectors including utilities, consumer staples, and healthcare each producing solid gains for the week. Energy also delivered solid gains as crude oil prices rose in anticipation of a potential U.S. military strike in Iran.

International Equities: AI fears that weighed on U.S. markets spilled over some into international markets this week as the developed international and emerging market (EM) stock indexes were only able to muster modest gains for the week despite the tailwind from the rotation out of U.S. technology stocks. The STOXX 600 secured its ninth straight positive month, but the best markets were in Asia, including Japan, Korea, and Taiwan, with the latter two countries getting a boost from strong demand for chips and memory given their exposure to the AI buildout. The U.S. dollar was relatively stable on the week and had little impact on non-U.S. returns.

Fixed Income, Currency, and Commodity Markets

Fixed Income: Despite modest credit spread widening during the week, core bonds, measured by the Bloomberg Aggregate Index, traded higher due to the continued rally out of the Treasury market. From the recent peak of 4.293% earlier this year, the 10‑year yield has fallen by roughly 30 basis points — the bulk of the move occurring in February. The decline in yields has coincided with AI‑driven displacement concerns weighing on equity and credit markets. Despite generally resilient economic data, which has continued to surprise to the upside (per the Bloomberg Economic Surprise Index), the drop in yields aligns with softening economic growth expectations.

Nominal Treasury yields reflect both inflation and growth expectations. Of the roughly 30 basis point decline, 25 basis points can be attributed to weaker economic growth expectations. The risk‑off tone has boosted Treasuries, with the Bloomberg Treasury Index up more than 1.5% month‑to‑date — making it the best‑performing major fixed income sector and reaffirming Treasuries’ role as a safe‑haven asset. Interestingly, the rally in rates was met with muted demand at this week’s 2‑year and 5‑year auctions (though Thursday’s 7‑year auction was solid), suggesting investors may view the rally as stretched at this point. With the 10‑year yield still within our fair‑value range of 3.75%–4.25%, we do not view this as an attractive point to chase the move. We remain neutral duration relative to benchmarks.

Commodities and Currencies: The broader commodity complex strengthened this week, highlighted by strong performance in precious metals. Silver led the advance with a 5.6% gain, while gold rose 1.3% and broke through resistance near its mid‑February highs. Safe‑haven buying intensified amid escalating U.S.–Iran tensions, uncertainty surrounding U.S. tariff policy, and a general pullback in equity markets. Oil prices also moved higher, with West Texas Intermediate (WTI) crude climbing nearly 1%. Concerns over a potential strike on Iran increased following the evacuation of non‑emergency U.S. embassy personnel in Israel. Adding to the anxiety, President Trump stated on Friday that he is “not happy” with Iran or the progress of negotiations over its nuclear program. At the same time, expectations grew that OPEC+ may announce higher production levels in April. The U.S. dollar eased modestly, pressured by declining interest rates and trade policy uncertainty, partially offsetting the impact of Friday’s hotter‑than‑expected wholesale inflation reading.

Economic Weekly Roundup

Consumer confidence rebounded as more consumers view a better employment situation, but the index is still significantly lower than the near-term high of late 2024.

• Consumers reported the most plentiful employment opportunities since November. The job market outlook for the next six months also improved in February. Good news for the consumer outlook.

  
  

• Spending plans on restaurants and travel were higher so far this year, supporting the discretionary sector outlook.

  
  

• The broader trend over the past 14 months is downward, as consumers are feeling pessimistic about geopolitical tensions and trade uncertainty.

  
  

Despite the rebound, the trend is still negative. The report revealed job market conditions are holding steady, one of the necessary conditions for the Federal Reserve (Fed) as they will likely hold rates steady for the next few meetings. The balance of risks tilt toward inflation, according to Fed officials. Inflation is likely to run hotter in the near term, consistent with the ISM prices paid signal and Friday’s wholesale inflation data, but by December, core PCE should be close to 2.2%.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: S&P Global U.S. Manufacturing PMI (Feb final), ISM Manufacturing report (Feb)

• Tuesday: Wards Total Vehicle Sales (Feb)

• Wednesday: MBA Mortgage Applications (Feb 27), ADP Employment Change (Feb), S&P Global U.S. Services and Composite PMIs (Feb final), ISM Services Index (Feb)

• Thursday: Challenger Job Cuts (Feb), Import and Export Price Indexes (Jan), Nonfarm Productivity (Q4 preliminary), Unit Labor Costs (Q4 preliminary), Initial Jobless Claims (Feb 28), Continuing Claims (Feb 21)

• Friday: Retail Sales (Jan), Change in Nonfarm, Private, and Manufacturing Payrolls (Feb), Average Hourly Earnings (Feb), Average Weekly Hours All Employees (Feb), Unemployment Rate (Feb), Labor Force Participation Rate (Feb), Underemployment Rate (Feb), Business Inventories (Dec), Consumer Credit (Jan)

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