Saxo Market Compass Summary - 23 February 2026

Overview

The week of February 16 to 20, 2026, was characterized by significant influences from monetary policy, geopolitical tensions, and trade policy, which shaped the direction of global markets. Despite a backdrop of hawkish Federal Reserve minutes and mixed economic data, equities showed resilience, while volatility remained elevated but orderly.

Equities

US Markets

US equities demonstrated strength, with the S&P 500 rising 0.6% on February 18 and an additional 0.7% on February 20. This occurred despite the Federal Reserve's cautious stance on rate cuts and a Q4 GDP growth rate of 1.4%. Notable performers included Nvidia and Amazon, driven by ongoing demand in AI, while Deere surged 11.7% after raising its guidance. Conversely, Walmart's stock fell 1.4% due to a cautious outlook.

European and Asian Markets

In Europe, the FTSE 100 reached a record high of 10,556, buoyed by banks and defense stocks. The STOXX 50 and STOXX 600 also saw gains, led by luxury and industrial sectors. However, Hong Kong's Hang Seng index fell 1.1% as tech stocks weakened ahead of Nvidia's earnings report.

Volatility

The VIX index remained around 20, indicating elevated but controlled volatility. Options pricing suggested a ±1–2% range for the S&P 500, reflecting event hedging rather than systemic stress. Investors showed a preference for downside protection, indicating a cautious approach without panic.

Digital Assets

Bitcoin traded between USD 67,000 and 69,000 before slipping to USD 65,700, while Ethereum hovered around USD 2,000. ETF flows indicated a reallocation within the crypto space, suggesting that digital assets are closely linked to macroeconomic conditions and US rate expectations.

Fixed Income

The US 10-year Treasury yield tested the 4.00% level before rebounding to 4.10%, influenced by the Fed's hawkish tone. In Japan, strong demand for JGBs led to lower yields, while inflation data supported a cautious approach from the Bank of Japan.

Commodities

Brent crude oil prices rose amid escalating US-Iran tensions, while gold prices fluctuated due to tariff uncertainties. Silver rebounded after mid-week weakness, and copper prices softened due to rising inventories.

Currencies

The US dollar experienced fluctuations in response to interest rate changes and trade policy developments. The EUR/USD and GBP/USD pairs dipped as the dollar strengthened mid-week, but the tone shifted again with renewed tariff headlines.

Key Takeaways

• US equities showed resilience despite hawkish Fed minutes and softer GDP data.
• European markets were supported by strength in defense and luxury sectors.
• Volatility remained elevated but contained.
• US yields tested the 4% mark before rebounding.
• Commodities reflected geopolitical risks rather than demand optimism.
• Digital assets consolidated in line with macro liquidity conditions.

Looking Ahead

Upcoming earnings reports from Nvidia and Home Depot will be critical for assessing AI capital expenditure and housing market dynamics. Additionally, President Trump's State of the Union address and various economic data releases will likely influence market sentiment.

Conclusion

The week highlighted a balancing act in the markets, with equities absorbing various macroeconomic and geopolitical pressures. Investors are advised to maintain diversification and disciplined risk management as they navigate these policy-driven crosscurrents.