Market Summary - February 20, 2026
On February 20, 2026, major US stock indices experienced a slight decline amid rising tensions between the US and Iran, coupled with concerns regarding artificial intelligence disruptions. The S&P 500 fell by 19 points (0.3%) to close at 6,861, while the Nasdaq 100 decreased by 101 points (0.4%) to 24,797. The Dow Jones Industrial Average also saw a drop of 267 points (0.5%) to 49,395. In contrast, the Russell 2000, which tracks small-cap stocks, managed to gain nearly 7 points (0.2%) to reach 2,665.
Sector Performance
Within the S&P 500 sectors, financials were the hardest hit, declining by 0.9%. Consumer discretionary and technology sectors followed closely behind. On a more positive note, utilities outperformed, increasing by 1.1%, with industrials also showing resilience.
Commodities and Currency Movements
In the commodities market, oil prices surged to year-to-date highs, reaching US$67.01. This increase was influenced by US President Donald Trump's ultimatum to Iran regarding nuclear negotiations, warning of severe consequences if a deal is not reached within 10 to 15 days. The US military is reportedly deploying two aircraft carriers and additional military resources to the region.
The US dollar index continued its upward trend, marking a fourth consecutive day of gains with a 0.1% increase. Recent jobless claims data showed a decrease to 206,000, down from a revised figure of 229,000, indicating a resilient labor market. This, along with hawkish signals from the Federal Reserve and escalating geopolitical tensions, has provided support for the dollar.
Upcoming Economic Data
Looking ahead, a busy economic calendar is anticipated, with key US metrics set to be released. At 1:30 PM GMT, the Bureau of Economic Analysis (BEA) will publish the first estimate of Q4 2025 GDP and the December PCE price index. The GDP is expected to show a growth rate of 3.0%, a slowdown from Q3's 4.4%, but still indicative of healthy economic performance. The GDP deflator is projected to decrease to 2.9% from 3.7%.
The PCE price index, a preferred inflation measure for the Fed, is expected to remain steady at 2.8% year-over-year, with a slight increase in the month-over-month figure to 0.3%. Core PCE data is anticipated to rise to 2.9% from 2.8% year-over-year. Any positive surprises in these data releases could reinforce the Fed's current monetary policy stance and support the dollar further.
Market Sentiment
Overall, the day's economic data will be crucial in either affirming or challenging the Fed's current approach. Given the current positioning of the dollar, any upside surprises could prompt short-covering among USD bears as the market heads into the weekend.