Market Memo

Alright, let’s get into it. The trading week of February 16, 2026 felt like the market trying to flex resilience while low key sweating every headline that crossed the tape. After the Presidents’ Day break, Tuesday opened thinner because parts of Asia were still closed for Lunar New Year, but that calm vibe disappeared fast as investors locked in on the inflation versus growth debate. The big moment came Friday when delayed Q4 2025 GDP printed at 1.4 percent, way under the expected 2.8 percent, which normally would have rattled everyone, but traders mostly brushed it off and blamed the weakness on the record government shutdown that froze federal spending late last year. At the same time, the Core PCE Price Index showed a 0.4 percent month over month increase, just warm enough to keep Federal Reserve officials sounding cautious and to push the 10 year Treasury yield toward 4.05 percent, reminding everyone that rate cuts are not a done deal. Meanwhile the so called AI fatigue theme kept playing out as mega cap tech names faced pressure over massive capital expenditure plans, and money rotated into more cyclical areas like Communication Services and Industrials that looked better positioned if growth stabilizes. Geopolitical tension also added spice as rising friction between the United States and Iran briefly sent crude oil higher and lifted the VIX above 20, flashing a quick fear signal before cooling off. The week ultimately ended on a strong note for bulls after the Supreme Court struck down the Trump administration’s broad emergency tariff powers, triggering a relief rally that helped the S&P 500 finish up 1.1 percent and the Nasdaq Composite climb 1.5 percent for the week, reinforcing that the buy the dip mentality is still alive and that, for now, investors are willing to look past soft growth data as long as earnings hold up and policy risks ease.