Your Monthly Market Newsletter, FEBRUARY 2026

Moving into February, the market landscape is steady with moderate growth as the U.S. economy is showing resilience, supported by AI-driven productivity. While initial 2026 forecasts were cautious, new outlooks are indicating that U.S. GDP growth is exceeding predictions as it is expected to grow at a steady pace, with forecasts ranging from 2.2& to 2.6% for the full year of 2026. 

The unemployment rate is expected to rise, with the potential to hit 4.5% to 4.6% in 2026 before stabilizing. Core inflation is currently projected to be moderate; however, it should remain above the 2% target. The anticipated increase in tax refunds February through March will be an indicator for levels of consumer spending. 

Wishing you a wonderful February! If you have any questions, please do not hesitate to reach out. 

Stocks

The New Year brought in fireworks for equity markets, with all major U.S. equity indices finishing the month positive. Equity markets looked much different starting this year, with smaller companies in the Russell 2000 leading equity markets, up +5.39%, followed by the Dow Jones rising +1.80%, and last year’s favorites, the S&P 500 (+1.45%) and the NASDAQ (+1.23%). The performance of the market so far this year can be attested to a shift away from the heavily concentrated environment we have seen the past couple of years where a handful of tech stocks drove the market. This year, however, concerns around AI spending, as well as a strong overall economy and anticipation of lower interest rates drove other areas of the stock market like small caps higher.

Sector Performance

Eight of the eleven sectors on the S&P 500 were positive in the first month of the year. The Energy sector led the way, outperforming as oil prices rose. The Materials sector also rose precipitously, largely in part from the continued investment in manufacturing and infrastructure. Healthcare, Technology, and Financials which ended negative on the month were particularly impacted by government policies announced by the White House. Strength in eight of the eleven sectors emphasizes the broadening theme we have seen from the major indices so far in 2026.

Bonds

Fixed income markets were relatively flat in January, as the rally of 2025 lost some momentum. Hotter inflation readings, and stronger economic data led investors to scale back expectations for additional near-term Federal Reserve rate cuts, pushing Treasury yields slightly higher across the curve. The yield on 2-year Treasury bonds rose 0.05%, and the 10-year yield rose 0.07%. As yields moved up, bonds sold off given the inverse relationship between interest rates and bond prices. Corporate bonds held up better than government bonds in January as investors remained confident companies would remain in good shape amid generally positive economic data.

Economic Update

The U.S. economy seemed to be on solid footing heading into the new year with all eyes on the Federal Reserve (Fed) as the release of inflation and labor market data would dictate how the Fed approaches future interest rate cuts. The last bit of delayed economic data from the government shutdown helped shed some light on inflation, confirming that it is slowly moving towards the Fed’s 2% target. The labor market showed signs of stabilization with declining hiring activity offset by a decline in the unemployment right. Retail sales data highlighted the continued strength of the consumer, contributing to the strongest quarterly GDP growth figure seen in two years. As investors prepare to digest the impacts from the One Big Beautiful Bill Act, and tariffs the data from this month suggests the economy entered the year on high note.

The Global Ocean Treaty for Protection of the Sea

This month, a global treaty to conserve the oceans came into effect, allowing nations to protect the marine biodiversity national boundaries. The objective of the High Seas Treaty, otherwise known as “The Global Ocean Treaty”, is to safeguard the world’s oceans beyond national jurisdiction. The international agreement was signed by 84 countries in 2023 and passed the threshold to become law last September after more than 60 nations formally ratified it.

The treaty has been described as, “a significant victory for ocean protection” by Greenpeace Charity as less than 1% of international waters are currently fully protected. The charity also highlighted, “We don’t need to imagine what fully protected sanctuaries could achieve,” noting that the Galápagos Marine Reserve is an example of how protected areas “can help wildlife bounce back”.

“If one sanctuary around a single island chain can deliver such hope and abundance, imagine what a whole network of high seas sanctuaries could do,” Ariana Densham from Greenpeace noted.

To read more, view the full article here.

THOUGHT FOR THE MONTH

^{Index Definitions}

^{Dow Jones Industrial Average:The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.}

^{Dow Jones U.S. Real Estate Total Return Index:The index is designed to track the performance of real estate investment trusts (REIT) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies.}

^{NASDAQ Composite:The NASDAQ Composite is a market-cap weighted index of all issues listed on the Nasdaq stock exchange. It is heavily weighted towards the technology sector.} 

^{S&P 500 Bond Index:The S&P 500® Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. Market value-weighted, the index seeks to measure the performance of U.S. corporate debt issued by constituents in the iconic S&P 500.}

^{S&P 500 Consumer Discretionary:The S&P 500® Consumer Discretionary comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.}

^{S&P 500 Consumer Staples:The S&P 500® Consumer Staples comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.}

^{S&P 500 Energy:The S&P 500® Energy comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.}

^{S&P 500 Financials:The S&P 500® Financials comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.}

^{S&P 500 Index:The S&P 500® index is a market-cap weighted index of the largest 500 companies headquartered in the United States. The index covers approximately 80% of available market capitalization.}

^{S&P 500 Utilities:The S&P 500® Utilities comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.}

^{S&P U.S. Aggregate Bond Index:The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P AggregateTM Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs.}

^{S&P U.S. Treasury Bond Index:The S&P U.S. Treasury Bond Index is a broad, comprehensive, market-value weighted index that seeks to measure the performance of the U.S. Treasury Bond market.}

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