Market Insights
Get insights into what has been happening in US and world markets, and other economic indicators.
Bottom Line Up Front
- U.S. news: The U.S. economy grew at a revised 4.4% annualized pace in the third quarter of 2025—the fastest GDP growth in two years. Standard & Poor’s 500 Index advanced 1.37%, Nasdaq Composite rose 0.95% and the Dow gained 1.73%.
- International news: The MSCI EAFE Index opened the year with a strong 5.19% gain. Canada’s S&P/TSX Composite Index set multiple record highs and in the Pacific Rim, Korea’s KOSPI stood out with a 23.97% rise.
- News from the Fed: As expected, the Federal Open Market Committee (FOMC) kept interest rates steady in January.
Time to Read
6 minutes
February 27, 2026
Monthly Market Insights: February 2026
U.S. and Canadian Markets
Stocks climbed in January as the tailwinds of solid economic data offset the headwinds of geopolitical tensions that rattled investors during the month.
The Standard & Poor’s 500 Index advanced 1.37%, while the Nasdaq Composite rose 0.95%. The Dow Jones Industrial Average gained 1.73%. The Toronto Stock Exchange picked up 0.66%.
A Choppy Rise
Stocks rose as 2026 kicked off—with the AI trade—led by chip manufacturers setting the pace. But, after the Justice Department announced an investigation into Federal Reserve Chair Jerome Powell over renovation costs for a Fed building, stocks came under pressure.
Investors were encouraged by inflation reports, which was followed by a solid retail sales report. However, geopolitical tensions and mixed results from money center banks weighed on stock prices. Investors were also encouraged when the White House said it was pursuing diplomatic approaches to resolving the international debate over Greenland and walked back talk about new tariffs.
Stocks largely went sideways during the last week of trading as investors flocked to mega cap tech names ahead of fourth-quarter reports, which pushed the S&P 500 above the 7,000 level for the first time.
Market reaction was muted following the Federal Reserve’s widely expected decision to hold interest rates steady and news that the White House nominated former Fed insider Kevin Warsh as the next Chair of the Federal Reserve.
U.S. Sectors
Eight of the 11 S&P 500 Index sectors finished the month in the green as market leadership continued to broaden beyond tech names. Energy (+14.18%) was the clear double-digit leader, while Materials (+8.64%), Consumer Staples (+7.51%), and Industrials (+6.65%) also logged solid performances. Real Estate (+2.68%) and Communication Services (+2.00%) posted more modest gains but still outperformed the S&P 500 overall. Utilities (+1.31%) and Consumer Discretionary (+1.47%) managed small gains.
Three sectors were under pressure, including Health Care (-0.04%), Information Technology (-0.06%), and Financials (-2.43%).
Canada Recap
Canada’s S&P/TSX Composite Index carried over its 2025 momentum into the new year, setting multiple record highs early in the month. Mining and materials groups were among the best performers, while financial names also contributed to the rally.
Markets lost some momentum after the White House proposed raising tariffs following the release of the Canada-China Economic and Trade Cooperation Roadmap by Canadian officials. However, markets improved after officials clarified their position and said they were actively negotiating with the U.S.
The Markets
| Market/Index | January 2026 Change | YTD Change |
|---|---|---|
| S&P 500 | 1.37% | 1.37% |
| NASDAQ | 0.95% | 0.95% |
| Russell 1000 | 5.83% | 5.83% |
| S&P/TSX Composite | 0.66% | 0.66% |
| 10-Year Treasury Notes | 4.24 | 0.08 |
| Fed Funds Rate | 3.50-3.75 | 3.50-3.75 |
The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance doesn't guarantee future results. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid.
What Investors May Be Talking About
Investors will continue to try separating the market’s signal from the noise created by daily headlines. They’ll be watching whether interest in the stock prices broadens out beyond tech names, including AI. As the technology begins to make its way into non-tech industries, more companies across more sectors of the economy are participating in the AI revolution.
A total of 306 S&P 500 companies mentioned AI on their third-quarter conference calls. Wall Street will be listening to companies' fourth-quarter conference calls with investors to learn if that number is expected to trend higher or lower in 2026.
World Markets
The MSCI EAFE Index opened the year with a strong 5.19% increase.
In Europe, the United Kingdom (+2.94%) and Spain (+3.31%) led the way among the majors. Italy (+1.30%) and Germany (+0.20%) posted more moderate gains while France slipped 0.28%.
Egypt (+14.24%) and Brazil (+13.70%) posted solid gains, while Mexico (+5.12%) also had a strong month.
China’s Hang Seng Index rose 6.85% while Korea’s KOSPI rose 23.97%, extending its 2025 gains into the New Year. Meanwhile, Japan’s Nikkei rose 5.80%.
World Market Recap
| Emerging Markets | January 2026 Change | YTD Change |
|---|---|---|
| Hang Seng (China) | 6.85% | 6.85% |
| KOSPI (Korea) | 23.97% | 23.97% |
| Nikkei (Japan) | 5.80% | 5.80% |
| Sensex (India) | -3.46% | -3.46% |
| EGX 30 (Egypt) | 14.24% | 14.24% |
| Bovespa (Brazil) | 13.70% | 13.70% |
| IPC All-Share (Mexico) | 5.12% | 5.12% |
| ASX 200 (Australia) | 1.78% | 1.78% |
| DAX (Germany) | 0.20% | 0.20% |
| CAC 40 (France) | -0.28% | -0.28% |
| IBEX 35 (Spain) | 3.31% | 3.31% |
| FTSE 100 (United Kingdom) | 2.94% | 2.94% |
| IT40 (Italy) | 1.30% | 1.30% |
The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance doesn't guarantee future results. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
Indicators
- Gross Domestic Product (GDP). The U.S. economy grew at a revised 4.4% annualized pace in the third quarter of 2025, ahead of economists’ expectations that GDP would remain unchanged from the Commerce Department’s 4.3% initial estimate. It was the fastest GDP growth in two years.
The Canadian economy grew at a 2.6% annualized clip in Q3, faster than the 0.5% growth economists expected.
- Employment. U.S. employers added 50,000 jobs in December, short of economists’ expectations. The unemployment rate ticked down to 4.4% in December, 0.1% age points lower than November’s pace and its first decline since June. Canadian employers added a net 8,200 jobs in December, stronger than expected. The unemployment rate in Canada rose to 6.8%.
- Retail Sales. In November, consumer spending rose 0.6% over the prior month, according to the latest available federal data. November’s gain was slightly ahead of market expectations and marked a pickup from October’s downwardly revised 0.1% month-over-month decline.
While federal data for December retail sales was still unavailable as of late January, the Chicago Fed’s Advance Retail Trade Summary estimated that retail and food services sales (excluding autos and auto parts) rose 0.6% in December over the prior month. That marked a slight uptick from November’s upwardly revised 0.5% monthly increase.
- Industrial Production. Industrial output rose 0.4% in December, beating expectations for a 0.1% uptick. Utility and manufacturing output drove much of the gains. Output grew 2.2% year over year in Q4, the fastest growth since 2022.
- Housing. Housing starts fell 4.6% in October (the latest available federal data) over the prior month. New home sales declined slightly by 0.1% in October—also the latest available federal data—over the preceding month, following September’s 3.8% increase.
Homebuilder confidence for newly built single-family homes slipped 2 points in January over the prior month, to a score of 37. (A reading over 50 indicates most single-family homebuilders are confident in overall housing market conditions, while a lower reading indicates less builder optimism.)
Sales of existing homes rose 5.1% in December over the prior month, rebounding from November. Year-over-year sales increased 1.4%, an improvement from November’s 1.0% annualized decline.
Regionally, sales increased month over month in all four regions, with the largest gains in the South (+6.9%) and West (+6.6%), while the Northeast and Midwest (+2% each) experienced more modest increases. Year over year, sales gained in the South (+3.6%), fell in the Northeast (-1.9%), and were flat in the Midwest and West. The median existing home sales price in December was $405,400, 0.4% higher than a year ago. The supply of unsold homes tightened to 3.3 months in December, but increased slightly from 3.2 months of supply a year prior.
- Consumer Price Index (CPI). As expected, U.S. consumer prices increased 2.7% year over year in December and were unchanged from November’s pace. Month over month, prices rose 0.3%, also in line with economists’ expectations. Core inflation, which excludes volatile food and energy prices, rose 2.6% year over year and 0.2% month over month—both cooler than expectations.
Consumer prices in Canada rose 2.4% in December year over year, quicker than expected and faster than November’s 2.2% annualized rate.
- Durable Goods Orders. Orders of manufactured goods designed to last three years or longer increased 5.3% in November (the latest available federal data), exceeding economists’ expectations for a 4.0% rise. The gain was primarily powered by a 98% increase in civilian aircraft orders.
Private-sector data suggests a contraction in manufacturing order flow in December, which means federal data (once published) may show a flattening or slight decline in durable goods orders
The Federal Reserve
As expected, the Federal Open Market Committee (FOMC) kept interest rates steady in January.
The meeting was noteworthy for the FOMC members' consensus on rates, which was a bit more divided at the December meeting. FOMC members voted 10-2 to keep the Federal Funds Rate steady at its current 3.5% to 3.75% target range. The vote followed three consecutive meetings at which the Fed cut rates.
The Federal Reserve’s next meeting is March 17-18, when the Fed will publish a Summary of Economic Projections.
By the Numbers: Valentine's Day
$27.5 Billion
The amount spent on Valentine's Day in the United States in 2025
1 Billion GBP
Total Valentine's Day spending in the United Kingdom in 2025
$97.80 CAD
Average per-person spend in Canada for Valentine's Day in 2024
154 EUR
Average spent per person in France, with 36% of the French celebrating
$188.81 USD
The average amount each person in the U.S. spent on Valentine's Day gifts and experiences in 2025
56%
The share of U.S. consumers expected to celebrate Valentine's day 2026
$14.6 Billion
The amount spent specifically on significant others in the United States
$6.5 Billion USD
Total spending on jewelry alone in the United States
65%
The percentage of Canadians who spent money on their significant others for Valentine's Day 2024
59%
The percentage of consumers globally who celebrate Valentine's Day
61%
The percentage of Britons who celebrated Valentine's Day in 2025
Disclosures
Navy Federal Financial Group, LLC (NFFG) is a licensed insurance agency. Non-deposit investments, brokerage, and advisory products are only sold through Navy Federal Investment Services, LLC (NFIS), a member of FINRA/SIPC and an SEC-registered investment advisory firm. NFIS is a wholly owned subsidiary of NFFG. Insurance products are offered through NFFG and NFIS. These products are not NCUA/NCUSIF or otherwise federally insured, are not guaranteed or obligations of Navy Federal Credit Union (NFCU), are not offered, recommended, sanctioned, or encouraged by the federal government, and may involve investment risk, including possible loss of principal. Deposit products and related services are provided by NFCU. Digital Investor offered through NFIS. Financial Advisors are employees of NFFG, and they are employees and registered representatives of NFIS. NFIS and NFFG are affiliated companies under the common control of NFCU. Call 1-877-221-8108 for further information.
↵Data sources: Based on data from WSJ.com; CNBC.com; TMX.com; Reuters.com; SSGA.com; Insight.FactSet.com; Investing.com; MSCI.com; KPMG.com; ChicagoFed.org; TradingEconomics.com; National Association of Home Builders; Realtor.com; ISM.org; National Retail Federation; NielsenIQ; Leger.com; MikMak Valentine’s Day Global Trends Report; ScalaHosting; Finder UK.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, or state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. Investing involves risks, and investment decisions should be based on your own goals, time horizon and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
Any companies mentioned are for illustrative purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, timeframe, and risk tolerance.
The forecasts or forward-looking statements are based on assumptions, subject to revision without notice, and may not materialize.
The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. The S&P 500 Composite Index is an unmanaged group of securities considered to be representative of the stock market in general. The Nasdaq Composite is an index of the common stocks and similar securities listed on the Nasdaq stock market and considered a broad indicator of the performance of stocks of technology and growth companies. The Russell 1000 Index is an index that measures the performance of the highest-ranking 1,000 stocks in the Russell 3000 Index, which is comprised of 3,000 of the largest U.S. stocks. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark for the performance in major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.
International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
The Hang Seng Index is a benchmark index for the blue-chip stocks traded on the Hong Kong Stock Exchange. The KOSPI is an index of all stocks traded on the Korean Stock Exchange. The Nikkei 225 is a stock market index for the Tokyo Stock Exchange. The SENSEX is a stock market index of 30 companies listed on the Bombay Stock Exchange. The Jakarta Composite Index is an index of all stocks that are traded on the Indonesia Stock Exchange. The Bovespa Index tracks 50 stocks traded on the Sao Paulo Stock, Mercantile, & Futures Exchange. The IPC Index measures the companies listed on the Mexican Stock Exchange. The MERVAL tracks the performance of large companies based in Argentina. The ASX 200 Index is an index of stocks listed on the Australian Securities Exchange. The DAX is a market index consisting of the 30 German companies trading on the Frankfurt Stock Exchange. The CAC 40 is a benchmark for the 40 most significant companies on the French Stock Market Exchange. The Dow Jones Russia Index measures the performance of leading Russian Global Depositary Receipts (GDRs) that trade on the London Stock Exchange. The FTSE 100 Index is an index of the 100 companies with the highest market capitalization listed on the London Stock Exchange.
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