Saxo Weekly Market Compass – 23 February 2026

(Recap week of 16 to 20 February 2026)

Headlines & introduction

Rates, geopolitics and trade policy shaped cross-asset direction.

Global markets navigated a week defined by hawkish Federal Reserve minutes, resilient but slowing US growth data, renewed Middle East tensions and late-week US tariff headlines. Equities remained broadly resilient despite higher yields, while volatility stayed elevated but orderly. Commodities responded quickly to geopolitical developments, and digital assets tracked macro liquidity conditions rather than internal crypto narratives.

It was a week where policy tone mattered more than positioning, and markets adjusted accordingly.

Equities

US: resilience despite higher yields and policy crosscurrents.

US equities traded in wide intraday ranges but held firm overall. The S&P 500 rose 0.6% on 18 February and added 0.7% on 20 February, even as Fed minutes (19 February) signalled caution on rate cuts and Q4 GDP printed at 1.4% (20 February). Nvidia and Amazon advanced on 18 February, reflecting continued AI-related demand, while Deere surged 11.7% on 20 February after raising guidance. Walmart slipped 1.4% the same day after issuing a cautious outlook.

Europe and Asia: local strength, selective earnings pressure and softer Hong Kong tech.

In the UK, the FTSE 100 reached a record 10,556 on 18 February, supported by banks and defence shares including BAE Systems. On the continent, the STOXX 50 rose 1.2% and the STOXX 600 gained 0.8% on 20 February as luxury and industrial names led. France’s LVMH rose 4.4% and Hermès 3.6%, while Airbus fell 6.8% after trimming production targets. In Italy, Enel declined 3.6% following tax changes. Hong Kong’s Hang Seng ended down 1.1% on 20 February as technology stocks cooled ahead of Nvidia’s results.

Market pulse: equity markets rotated across sectors rather than retreating from risk.

Volatility

Elevated, but controlled.

The VIX hovered around 20 throughout the week, easing to 19.62 on 18 February before firming again into the PCE release on 20 February. Short-term volatility gauges cooled mid-week, then re-tightened as inflation and tariff headlines approached.

Options pricing implied weekly S&P 500 moves in a ±1–2% range into expiry, consistent with event hedging rather than systemic stress. Skew remained supported for much of the week, indicating persistent demand for downside protection.

Market pulse: investors are hedging events, not pricing crisis.

Market sentiment based on options flow data

Prudence without capitulation.

Across equities and metals, last week’s options activity pointed to disciplined risk management. In broad indices and mega-cap technology, confirmed opening flow leaned heavily toward near-term downside protection, signalling that institutional participants were unwilling to remain unhedged. At the same time, selective longer-dated upside positioning and structured call activity suggest exposure was being recalibrated rather than cut.

In gold and silver, upside participation was visible, but accompanied by hedges in mining equities and targeted downside structures. The aggregate message was not panic, but caution: investors appear to be staying invested while actively pricing in volatility in an environment where macro and headline risks remain elevated.

Market pulse: positioning reflects recalibration, not retreat.

Digital assets

Liquidity-driven consolidation.

Bitcoin traded largely between USD 67,000 and 69,000 during the week before slipping toward USD 65,700 on 23 February as tariff uncertainty resurfaced. Ethereum held near USD 2,000 before easing toward USD 1,880.

ETF flows showed divergence rather than broad withdrawal, suggesting reallocation within the space. Crypto-linked equities broadly tracked US risk sentiment, reinforcing the view that digital assets remain closely tethered to macro conditions and US rate expectations.

Market pulse: crypto continues to behave as a high-beta liquidity proxy.

Fixed income

Yields test and rebound around key levels.

The US 10-year Treasury yield approached the 4.00% threshold early in the week before rebounding toward 4.10% after hawkish Fed minutes and a weak 20-year auction on 19 February. Two-year yields backed up toward 4.47%, keeping “higher for longer” expectations in play.

In Japan, strong demand at a five-year JGB auction (17 February) pushed yields lower, while January CPI slowed to 1.5% (20 February), reinforcing a measured Bank of Japan path.

Market pulse: bond markets remain the primary transmission channel for macro shifts.

Commodities

Energy and precious metals reflect geopolitical risk.

Brent crude rose toward USD 70–71 during the week as US–Iran tensions intensified, before easing modestly. Gold traded within a USD 4,860–5,140 range and briefly moved above USD 5,100 late in the week as tariff uncertainty revived defensive demand. Silver rebounded after mid-week weakness, while copper softened amid rising inventories and seasonal disruptions linked to Lunar New Year.

Market pulse: geopolitical headlines are supporting defensive commodities, while growth-sensitive signals stay mixed.

Currencies

Dollar swings with rates and trade.

The US dollar strengthened mid-week following hawkish Fed minutes, with EURUSD dipping below 1.1800 and GBPUSD breaking under 1.3500 between 19 and 20 February. The tone shifted again on 23 February as renewed tariff headlines weighed on the dollar.

USDJPY traded in a 153–155 range as yield spreads fluctuated, while the Australian dollar outperformed following strong labour data on 19 February.

Market pulse: foreign exchange remains rate-led, with trade policy adding tactical volatility.

Key takeaways

• US equities showed resilience despite hawkish Fed minutes and softer GDP.
• European markets were supported by defence and luxury strength.
• Volatility remained elevated but contained near 20.
• US yields retested the 4% zone before rebounding.
• Oil and gold reflected geopolitical risk rather than demand optimism.
• Digital assets consolidated in line with macro liquidity conditions.

Looking ahead (23 to 28 February 2026)

Earnings in focus: AI, housing and corporate spending.

Nvidia reports on 25 February, a key test for the AI capital expenditure narrative and broader technology valuations. Home Depot reports on 24 February, with housing demand, pricing power and inventory commentary likely to be closely watched. Canadian banks and Dell later in the week extend the read-through to credit conditions and enterprise IT spending, while Berkshire Hathaway’s results on Saturday offer a broader barometer of conglomerate-level economic exposure.

Policy and macro catalysts.

President Trump delivers the State of the Union on 24 February, with trade policy and fiscal framing likely to influence market tone following recent tariff-related legal developments. Federal Reserve speakers, including Governor Waller, remain on the calendar, keeping rate expectations in focus ahead of March policy discussions.

On the data front, the Case-Shiller home price index, weekly jobless claims and January PPI are key releases. A surprise in producer inflation could quickly feed through to front-end yields and the US dollar, with knock-on effects for growth equities and digital assets.

• For long-term investors, the emphasis remains on earnings durability in a higher-rate environment.
• For active investors, event sequencing around earnings and macro data may create tactical volatility windows across sectors.

Market pulse: rates and forward guidance will likely determine whether resilience extends or risk is repriced.

Conclusion

The week of 16 to 20 February highlighted a market balancing firm macro data, cautious central bank messaging and renewed trade policy uncertainty. Equities absorbed crosscurrents through sector rotation, bonds reasserted their influence over valuations, and volatility remained elevated but orderly.

With major earnings and political communication ahead, positioning appears tactical rather than complacent. Diversification and disciplined risk management remain essential as markets navigate policy-driven crosscurrents.