Markets Update - 2/26/26

Update on US equity and Treasury markets, US economic data, the Fed, select commodities and a look at the upcoming day with lots of charts!

Feb 26, 2026

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US equity indices started the day very modestly higher as traders digested Nvidia’s blow out earnings from the previous evening which had initially sent shares much higher before paring that to around +1% at the open. Those gains through would turn to losses with the stock ending -5.5% lower, its worst day since April. . Salesforce, in contrast started the day down more than 1% after the software company projected disappointing fiscal 2027 revenue estimates. However, that loss would turn into a +4% gain by the day’s end, to give you some indication of the topsy-turvey nature of today’s action.

Indices would travel similar paths Thursday, mostly spending the morning in the red before bottoming at around 1.30pm ET and rallying from there. But the depth of the fall and height of the rally saw them end in very different places w/the Russell 2000 leading +0.5% while the Nasdaq weighted down by the drop in Nvidia and other heavyweights was -1.2%, SPX/DJIA finished in between -0.5%/Unch. The equal-weight SPX though was +0.6% as today was mostly a story of megacap weakness.

Elsewhere, bond yields fell with the 10yr testing 4%, and the dollar also was lower. Crude, gold, natgas, and bitcoin also were down, while copper was up (all covered in the subscriber section with charts).

The market-cap weighted S&P 500 (SPX) was -0.5%, the equal weighted S&P 500 index (SPXEW) though +0.6%, Nasdaq Composite -1.2% (and the top 100 Nasdaq stocks (NDX) -1.2%), the SOXX semiconductor index -3.2%, and the Russell 2000 (RUT) +0.5%.

Morningstar style box mostly green Thurs with the largest caps getting the weakest results.

Market commentary:

“The market is very much in ‘prove it’ mode, and Nvidia just didn’t quite ‘prove it’ with these earnings,” said Tom Graff, Facet’s chief investment officer, said to CNBC, noting concerns around the chipmaker’s deal with OpenAI.
“Nvidia is dealing with the cross section of high expectations priced into the stock, but also a skeptical market,” he also said. “That will probably make for a bumpy ride for at least the next couple of quarters.”
“The number one company that everyone’s been watching for the tech trade — Nvidia — is not going up” after earnings, said Craig Johnson, chief market technician at Piper Sandler. “It’s as simple as that.”
The reason why investors didn’t launch into a frenzy after seeing revenue, net income, and guidance come in way better than expected is that Nvidia rarely misses on those metrics, according to Hardika Singh at Fundstrat Global Advisors. “But where it did miss was easing investors’ concerns about its narrowing moat in the evolving world of compute and explaining its gameplan for how it’ll fare in a world of AI disruption that could upend all kinds of businesses from cybersecurity to food delivery to banks,” she said.
“Salesforce earnings were solid, but its weak guidance is not helping to quell this software sentiment wreck,” said James Demmert, chief investment officer at Main Street Research. “Salesforce faces a rough future due to AI advancements, but we also think the software industry’s recent declines are a bit overdone.”
“When you look at software right now, the earnings revisions on a one to two-year basis are positive,” J.P. Morgan Global Wealth Management U.S. equity strategist Abigail Yoder said Wednesday on CNBC’s “Closing Bell.”
“So this isn’t about what’s going to happen to software earnings in the next one to two years,” she said. “This is about their terminal value in ascribing a certain valuation to that, which I think the market is just wrangling around right now.”
Nvidia’s shares “not doing much was quite instructive, especially within the context of one of the other companies that reported — Salesforce,” said Gary Paulin, chief investment strategist at Northern Trust Asset Management. “The concern is that the more success Nvidia has, the more concern there is in the market that there is more disruption.”
Across the market, “broader exposure matters, with leadership expanding beyond mega‑cap technology to small caps, mid caps, and international stocks as investors focus on improving profit trends and former laggards,” Truist Chief Market Strategist Keith Lerner wrote in a Thursday note. He flagged a widening “opportunity set” across sectors, highlighting industrials, which are benefiting from AI-related capital spending, along with energy and materials.
Nvidia’s earnings and guidance were good, but there are still some questions about whether the firm can maintain its huge gross margins going forward, according to Matt Maley at Miller Tabak. As we move into March, he sees a few issues that could create some headwinds. Whether it be anxiety over AI profitability, worries over the impact of that technology on several sectors or concerns surrounding the private-credit market, Maley said there are plenty of reasons to think next month will be a rough one for stocks. “However, momentum is a very powerful force in the marketplace,” he added. “So, if we can see a further advance as we move into March, we might finally see the broad market experience another rally leg off of the 2022 bear-market lows.”
The recent moves in the market isn’t changing Wells Fargo Investment Institute’s bullish stance on equities. “Underneath the surface of volatile headlines, equity markets continued to show signs of rotation and broadening out consistent with our expectations that economic growth will accelerate this year,” said Doug Beath the firm’s global equity strategist, in a Wednesday note.
Beath believes that the rotation is “a prelude to broad equity gains this year,” adding that investors should “stay nimble” in the face of anticipated volatility.
“We believe this market chop is an opportunity for new cash in U.S. Large Cap Equities and the Financials sector, which has pulled back and remains among our favorite sectors,” he said. “Going forward, we’ll continue looking through headline volatility to focus on the economic and earnings improvement that we expect.”
For Mohit Kumar, chief strategist for Europe at Jefferies, markets are being “too sanguine” about risks of a limited strike by the US on Iran and an increase in short-term tensions. While a long-drawn war is unlikely, the issue could weigh on markets over the coming days. “We have reduced our risk profile into the weekend,” Kumar wrote. “Our medium-term view remains bullish and we would be looking to add at better levels.”
“Traders might just be taking some comfort in the fact that both sides turned up and talks are underway, given the unpredictability of the relationship between the US and Iran. The timing is key, however. Any indication that a deal isn’t coming imminently risks a reversal and even a spike higher.” — Conor Cooper, Macro Squawk.

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In individual stock action:

There was some encouraging news around AI from the software sector. Shares of Salesforce Inc. rose 4.0% after the company gave a strong outlook for long-term sales and announced a large share buyback. And Snowflake Inc. rallied 2.3% as analysts were positive on its earnings and prospects with AI.

Energy stocks swung from early losses to slight gains on Thursday, tracking with oil prices, as Iran said nuclear talks with the US have progressed “very intensely and very seriously.”

Paramount Skydance Corp. shares jumped 10% after reporting better-than-anticipated sales and earnings, days after submitting a new bid to buy Warner Bros. Discovery Inc. Rival bidder Netflix Inc. advanced 2.3%. After hours Netflix said they are giving up their pursuit of Warner Brothers after the Paramount bid was "deemed superior".

Also in late hours, Dell Technologies Inc. gave an outlook for sales of its AI servers that exceeded estimates sending shares higher. Jack Dorsey’s Block Inc. is cutting 4,000 employees, reducing its workforce by nearly half as the financial technology firm places a bet on AI changing the future of labor productivity which also saw shares jump, while CoreWeave Inc., an operator of AI data centers, reported a bigger loss than anticipated seeing shares fall.

Companies making the biggest moves after-hours from CNBC.

Corporate Highlights from BBG:

Warner Bros. Discovery Inc. said a new offer from Paramount Skydance Corp. is a better deal for shareholders than the one it agreed to earlier with Netflix Inc.
Flutter Entertainment Plc, owner of the FanDuel gambling platform in the US, reported fourth-quarter results that fell short of Wall Street estimates.
Sweetgreen Inc. reported a full-year outlook that fell short of expectations as the fast-casual salad chain continues to contend with declining store traffic.

Mid-day movers from CNBC: