Market Analysis Summary - February 20, 2026

Key Highlights

• SP500 moved higher as traders reacted to Trump's comments and the U.S. Supreme Court's decision on tariffs.
• NASDAQ gained momentum amid increased risk appetite.
• Dow Jones tested resistance levels between 49,500 and 49,600.

Market Reactions to Tariff Decisions

The U.S. Supreme Court ruled that former President Trump's tariffs were imposed beyond his authority, rendering them illegal. This decision has significant implications, as it may lead to potential refunds for importers amounting to approximately $170 billion, pending a lower court's ruling.

In response, Trump announced plans to impose a new 10% global tariff under Section 122, while maintaining existing tariffs under Sections 232 and 301. He indicated that discussions regarding tariff refunds could take years, suggesting that this issue may not be an immediate market catalyst.

Economic Data Overview

Traders also considered recent economic data, which showed a GDP growth rate of 1.4% for the fourth quarter, significantly below the expected 3%. This unexpected weakness may prompt the Federal Reserve to adopt a more dovish stance.

The Michigan Consumer Sentiment report revealed a slight increase in sentiment from 56.4 in January to 56.6 in February, although it fell short of the forecast of 57.3. Notably, year-ahead inflation expectations decreased from 4.0% to 3.4%.

Manufacturing PMI fell from 52.4 to 51.2, and Services PMI decreased from 52.7 to 52.3, both indicating a slowdown in economic expansion.

New Home Sales saw a month-over-month increase of 15.5% in November, followed by a slight decline of 1.7% in December, both exceeding analyst expectations. Personal Spending and Personal Income figures met forecasts, growing by 0.4% and 0.3%, respectively.

Sector Performance

Consumer cyclical stocks were among the top gainers, buoyed by the Supreme Court's tariff ruling. Conversely, energy stocks experienced a downturn due to a pullback in oil prices, despite Trump's comments regarding potential military action against Iran.

Technical Analysis

The SP500 index climbed above the resistance level of 6870-6880, aiming for further gains towards the next resistance at 6940-6950. The NASDAQ index also showed positive movement, with potential to rise towards 25,200-25,250 if it settles above the 50 MA at 24,901. The Dow Jones is attempting to break above the 49,600 level, with a target of reaching the 50 MA at 49,702.

Conclusion

The market's reaction to the Supreme Court's ruling on tariffs and the subsequent comments from Trump have created a dynamic trading environment. Investors are closely monitoring economic indicators and sector performances as they navigate potential market shifts.