Feburary Market Recap

Top Global News Events

1. The US announced plans to collaborate with Mexico on critical mineral mining (Feb 4)

2. Japanese PM Sanae Takaichi called snap elections and won a supermajority (Feb 8)

3. The European Parliament backed the ECB’s plan for an online‑and‑offline digital euro (Feb 10)

FOMC

There was no FOMC meeting in February of 2026. At the January 2026 meeting, the FOMC kept the federal funds target range unchanged at 3.50%–3.75%. The next Fed meeting will be held in mid-March.

Market Recap

Index Performance

S&P 500: -0.8% to -0.9%

Nasdaq: -2.3% to -3.3%

Dow Jones:+0.2% to +0.3%

Emerging Markets: +5.5%

Utilities:+9.9% to +10%

Emerging Markets Outperform US Large Indices

Although the US indices like the S&P 500 fell in February, the global market as a whole was up. Major US AI-linked mega cap companies saw a correction, with the Magnificent 7 stocks (Apple, Nvidia, Alphabet, Microsoft, Tesla, Amazon, and Meta) down 7% in the month. Such a discrepancy between the top market cap stocks and emerging markets could signal a rotation, rather than panic, proving that the market is simply shifting away from a US-centric tech model to include more global emerging companies in the growth.

In times like this, it is key to be mindful of diversification. While major stocks can have years where they rally, like Nvidia in 2024, it is important for all portfolios to minimize risks by tilting more into emerging markets seeking opportunities to see gains in smaller cap stocks or non-US markets.

Sector Tilt

While tech has been by far the best performing stocks recently, especially with the rise of artificial intelligence bolstering the strength and efficiency of technology companies, February saw a shift from tech gains to gains by more “staple” industries like utilities and energy. While tech is not doomed, nor is the “AI bubble” popping, February serves as a reminder that the magnificent tech industry does not always perfect the best in the market.

While tech will always chase the headlines with its rapid innovation, it is important to keep an eye on trends and new capabilities in other sectors. Current tensions raising energy prices are an example of how keeping an eye out for trends in non-traditional growth sectors could pay off.

In conclusion, the theme of February is correction, and the market trends highlight the importance of balancing risk and potential for growth in a portfolio. There will be months where tech stocks of mega US corporations skyrocket, but relying on mega cap stocks will always pose a risk and bring extra volatility. It is important to have a diverse portfolio that can hedge against these risks, while taking advantage of potential rotations and gains in more traditional and stable industries or emerging markets. February proves once again, that a good portfolio is a diverse portfolio.