Monthly Market Review
The U.S. stock market ended the month on a rather sour note, with both the S&P 500 and the NASDAQ closing February in the red, while the Dow managed to just edge into the black. After a strong start in January, the tech rally cooled, as investors grew concerned about market concentration. Tech stocks tumbled, while defensive and cyclical stocks trended higher. Mega-cap stocks, which carried the market throughout 2025, saw increased volatility in 2026. Investors questioned big-tech valuations, seizing an opportunity to take profits. In February, money moved to value stocks, such as energy, materials, and consumer staples.
While January was a strong month for the U.S. economy, February presented a more complex picture. The labor market stabilized somewhat, while new trade policies and fiscal shifts created volatility in the markets. Gross domestic product appears to be in a recovery phase following last year's government shutdown. Economic growth slowed from 4.4% in the third quarter of 2025 to 1.4% in the fourth quarter. Consumer spending grew by 2.4% in the fourth quarter vs. an expansion of 3.5% in the previous quarter and 3.9% from a year earlier.
The labor market continued to show signs of moderate strengthening. Among the market sectors, energy, utilities, consumer staples, and industrials led the way, while consumer discretionary and information technology each fell more than 7.0%.
U.S. Treasuries began the month with yields trending higher due to sticky inflation and a resilient economy. However, the end of the month saw yields plunge to multi-month lows. Gold prices rebounded from a notable crash at the end of January, ultimately regaining momentum to close above the $5,000 mark.
International Markets
European equities generally fared well in February as investors shrugged off geopolitical jitters and U.S. trade threats. Markets were buoyed by solid corporate earnings and overall improvement in business activity across the continent. Asian markets, on the other hand, were divergent with record-breaking rallies in Japan and South Korea contrasted by generally muted growth in China and Hong Kong. For February, the STOXX Europe 600 Index rose 3.7%; the United Kingdom's FTSE advanced 6.7%; Japan's Nikkei 225 Index gained 10.4%; while China's Shanghai Composite Index ticked up 1.1%.
On A Personal Note
Jeff and Peggy were able to go to Italy and see a few of the Olympic events. Figure skating, skiing, and the semi-finals of the USA Hockey Team. They said the Italian people were extremely hospitable. Drew and Stephanie both celebrated their birthdays. No need to say how old they are, but Drew wanted to be sure that everyone knows Stephanie's came first! Chris was able to spend some time in Palm Springs for an annual golf trip. It was great to get away, get some sunshine, and get some golf. Lisa and David went to a couple different concerts at the Little Miami Brewing Company Event Center. They are looking forward to summer and going to see a few concerts at Riverbend Music Center. Sam’s family came to town for a fun weekend visit. They were first timers to the American Sign Museum, and it did not disappoint! Taylor’s family celebrated Charlie turning one year old with a trip to the Newport Aquarium and a birthday party at home with loved ones. She can’t believe how quickly a year went by.
