US financial markets traded in a narrow range after fresh data showed slower economic growth alongside firmer inflation. Investors kept focus on the Federal Reserve policy path, with rate markets still signaling expectations for easing later in 2026.

The S&P 500 traded near flat on the day, even as most constituents declined. The NASDAQ 100 rose about 0.3%, supported by pockets of tech strength. The Dow Jones Industrial Average fell about 0.3%, reflecting broader pressure in cyclicals and select blue chips. 

US GDP Growth Slows as Core PCE Inflation Stays Elevated

The US economy grew at a rate of 1.4% in Q4 2025, down from 4.4% in Q3, as per the US Bureau of Economic Analysis. Consumer spending and investment were strong, but government spending and exports were weaker.

The US economy grew by 2.2% in 2025. This is a cooler pace than in previous years. Analysts said that the shutdown of the government contributed to the slowdown in the fourth quarter.

Inflation data complicated the picture. The core PCE price index, the Fed’s preferred underlying inflation gauge, rose 0.4% in December and 3.0% from a year earlier, reflecting persistent price pressures as 2025 ended. The headline PCE measure rose 0.4% on the month and 2.9% year over year.

Stocks, Treasuries, and the Dollar Hold Steady as Fed Timing Stays in View

Markets showed limited directional conviction after the releases. Early trading kept major US equity benchmarks close to flat, with declines across many index constituents offset by gains in select sectors. Government bond yields also moved modestly as investors weighed slower growth against hotter inflation.

Interest rate expectations were in the spotlight. The minutes of the Fed’s late January meeting, published on Wednesday, February 18, 2026, revealed that the Fed members adopted a cautious approach regarding cuts in interest rates, with some members discussing conditions that could necessitate a tighter monetary policy if inflation remains strong.

The US dollar traded in an irregular and tight range but was on track for a strong week as market participants adjusted to the Fed’s message. Investors also followed global positioning trends, with strategists observing that positioning in early 2026 has been supportive of non-US equities, suggesting a shift in focus to international markets.

Geopolitics, Oil Prices, and Options Positioning Add to Market Risk

Geopolitical headlines also influenced sentiment. US-Iran tensions rose after President Donald Trump set a short deadline for progress on nuclear talks, a development that kept crude prices near multi-month highs. Energy traders focused on supply risks tied to the Strait of Hormuz, a key global oil transit route.

Positioning dynamics added another variable. A large wave of listed-options contracts was set to expire on Friday, with estimates placing the notional value near $3 trillion. Traders often watch such expirations because hedging flows can amplify intraday moves in index futures and heavily traded stocks.

Separately, investors tracked notable cross-asset price action. Cryptocurrency markets held firm, with Bitcoin trading around the $65,000 price range in morning pricing referenced in market wraps, alongside smaller moves in ether.

Corporate Highlights

• Akamai Technologies issued a weaker-than-expected adjusted earnings outlook for Q1 and the full year.

• Newmont guided to lower gold production this year, citing planned upgrades and weaker output at some ventures.

• Barrick Gold faced a dispute after Newmont issued a notice of default tied to a Nevada joint venture.

• BHP signed a nonbinding letter of intent with Faraday Copper to explore restarting a historic Arizona copper mine.

• Starbucks expanded its India strategy with new stores and menu items as it works to improve performance.

• Anglo American reported another write-down related to De Beers as the diamond industry faces a deep downturn.

• Danone estimated a €35 million to €70 million first-quarter hit tied to an infant formula recall.

• Enel is preparing a strategy update that is expected to focus on Europe and the US, according to sources.

• Opendoor Technologies rose sharply premarket after reporting quarterly revenue above consensus estimates.

• Grail fell heavily after saying its Galleri multi-cancer test missed a primary endpoint in a study. 

The US Supreme Court ruled 6–3 against the administration’s sweeping global tariffs on February 20, 2026. The court said the emergency powers law used, the International Emergency Economic Powers Act, does not authorize broad tariff hikes. 

The decision shifts tariff authority back toward Congress and complicates the White House’s trade strategy. It also raises questions about refunds on duties already collected and about whether officials will reissue tariffs under other statutes. 

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