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Market Indices | |
At-A-Glance | |
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February 2026 | |
The three major U.S. equity averages finished mixed in February with the S&P 500 down a second time in the past three months and the Nasdaq Composite (-3.33%) posting its worst month since March 2025. Investors shifted out of Big Tech mega cap stocks and rotated into cyclical-based sectors and other traditional safe havens including U.S. Treasurys and precious metals. Wall Street woes included mounting tariff repercussions following the Supreme Court IEEPA decision, geopolitical risks in Iran, and selective selloffs in artificial intelligence (AI) related stocks. Software service firms were again among the hardest hit. Risks intensified at month end after a leading payments company announced plans to cut 40% of its workforce as it embraces AI. Gold futures bounced back from January’s month-ending slump, gaining nearly 11% for its biggest monthly gain since January 2012. After surging nearly 5.4% in January, the small cap-focused Russell 2000 Index outperformed its larger cap peers in February, albeit gaining just 0.8% and lifting its 2026 year-to-date (YTD) gain to 6.2%. Meanwhile, corporations stepped up their stock-buyback operations with over 200 companies authorizing repurchases that totaled over $233B in February, the largest February on record and third-largest month ever, according to Birinyi Associates. February reported economic data also proved challenging for investors. The delayed initial reading of fourth quarter 2025 GDP growth slowed to +1.4%, half the expected pace of +2.8% and down significantly from 4.4% growth recorded for Q3 2025. Quarter-over-quarter, the deceleration primarily reflected the partial government shutdown with federal spending slumping 17%, along with downturns in exports, and consumer spending. Personal consumption expenditures (PCE) increased at 2.4% annualized, matching forecast but down from 3.5% Q3 growth. Wholesale inflation edged higher with the Producer Price Index rising 0.5% in January, the most since September (+0.3% expected). More favorably, long term mortgage rates fell below 6% for the first time in over three-years with the average 30-year fixed home mortgage rate at 5.98%, down from 6.76% a year ago. With the Q4 corporate earnings season nearly complete, the blended year-over-year earnings growth for S&P 500 companies stands at 14.2%, according to FactSet. At the start of the earnings season, EPS growth was forecast to expand by 8.3%, registering its fifth consecutive quarter with double-digit earnings growth. Value stocks of all sizes broadly outperformed Growth stocks for a second straight month with the Russell 1000 Large Cap Value Index outpacing the Russell 1000 Large Cap Growth Index by a 5.95% differential (6.1% differential in January). This marked the fourth consecutive monthly Value over Growth outperformance, and their fifth largest performance gap since 2002. For the two-month start to 2026, the Large Cap Value over Growth YTD differential jumped to 12.1%. | |
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Top & Bottom Performers | |
Seven of the S&P 500’s eleven major sector groups posted February gains with cyclical-oriented sectors continuing to outperform while last year’s biggest gainers continued to decline. | |
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Foreign equities in developed markets continued to outperform the U.S. in February, even as the U.S. dollar edged 0.7% higher. The MSCI EAFE Index rose over 4.6% last month, outpacing the S&P 500 by nearly 5.4%. Emerging markets posted stronger gains, jumping 5.5% in January. MSCI indices for Korea (+22.02%) and China (-5.77%) highly diverged last month. Turning to fixed-income markets, U.S. Treasurys capped their largest monthly price gains in a year, sending short-term yields to their lowest levels in four years as investors sought safer havens away from the mounting negative equity catalysts. The safety and liquidity appeal of U.S. Treasuries drove a rally in benchmark 10-year T-Notes, sending its yield below 4% for the first time since November, ending February at 3.961% while the yield on policy-sensitive two-year Treasurys tumbled to 3.379%, its lowest level since 2022. Yields fall as prices rise. The Bloomberg U.S. Government Index advanced 1.81% in February after slipping 0.09% in January, while the longer-duration Bloomberg U.S. Government Long-term Bonds Index surged 4.19% following a 0.47% January decline. On a broader basis, investment-grade bonds of all types, as measured by the Bloomberg U.S. Aggregate Bond Index, gained 1.64% last month, while Bloomberg’s U.S. Corporate High Yield Bond Index, representing holdings of below investment-grade (junk-rated) bonds, underperformed with just a 0.19% gain. Bloomberg’s U.S. Municipal Bond Index gained 1.25%, extending its YTD gain to 2.20% for its best two-month start to a year since 2020. | |
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This report is created by Cetera Investment Management LLC. For more insights and information from the team, follow @CeteraIM on X. |
About Cetera® Investment Management
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Disclosures
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Glossary
The Bloomberg Barclays Capital U.S. Aggregate Bond Index, is a broad based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government–related and corporate debt securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency) debt securities that are rated at least Baa3 by Moody’s and BBB- by S&P. Taxable municipals, including Build America bonds and a small amount of foreign bonds traded in U.S. markets are also included.
The Bloomberg Barclays US Municipal Bond Index covers the USD-denominated long-term tax exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and prerefunded bonds. Eligible securities must be rated investment grade (Baa3/BBB- or higher) by Moody’s and S&P and have at least one year until final maturity, but in practice the index holding have a fluctuating average life of around 12.8 years.
The Bloomberg Barclays US Corporate High Yield Index measures the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high yield if the middle rating of Moody's, Fitch, and S&P is Ba1/BB+/BB+ or below, excluding emerging market debt. Payment-in-kind and bonds with predetermined step-up coupon provisions are also included. Eligible securities must have at least one year until final maturity, but in practice the index holdings has a fluctuating average life of around 6.3 years.
The Barclays U.S. Government Bond Index is comprised of the U.S. Treasury and U.S. Agency Indices. The index includes U.S. dollar-denominated, fixed-rate, nominal US Treasuries and US agency debentures (securities issued by US government owned or government sponsored entities, and debt explicitly guaranteed by the US government).
The Bloomberg Commodity Index is a broadly diversified index that allows investors to track commodity futures through a single, simple measure. It is composed of futures contracts on physical commodities and is designed to minimize concentration in any one commodity or sector. It currently includes 19 commodity futures in five groups. No one commodity can comprise less than 2% or more than 15% of the index, and no group can represent more than 33% of the index (as of the annual reweightings of the components).
The Cboe Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices.
The MSCI EAFE is designed to measure the equity market performance of developed markets (Europe, Australasia, Far East) excluding the U.S. and Canada. The Index is market-capitalization weighted.
The MSCI Emerging Markets is designed to measure equity market performance in global emerging markets. It is a float-adjusted market capitalization index.
The MSCI All-Country World Index (ACWI) is a market cap weighted index designed to represent performance of the full opportunity set of large- and mid-cap stocks across 23 developed and 26 emerging markets, covering more than 2,700 companies across 11 sectors and approximately 85% of the free float-adjusted market capitalization in each market.
The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.
The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower forecasted growth values.
The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe and is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe and is a subset of the Russell 1000 Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership. The Russell Midcap represents approximately 31% of the total market capitalization of the Russell 1000 companies.
The S&P BSE SENSEX Index is a free-float market-weighted index of 30 well-established and financially sound stocks on the Bombay Stock Exchange, representative of various industrial sectors of the Indian economy.
The S&P 500 is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ.
The NASDAQ Composite Index includes all domestic and international based common type stocks listed on The NASDAQ Stock Market. The NASDAQ Composite Index is a broad-based capitalization-weighted index.
The Shanghai Composite Index is a stock market index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange.
The U.S. Dollar Index is a weighted geometric mean that provides a value measure of the United States dollar relative to a basket of major foreign currencies. The index, often carrying a USDX or DXY moniker, started in March 1973, beginning with a value of the U.S. Dollar Index at 100.000. It has since reached a February 1985 high of 164.720, and has been as low as 70.698 in March 2008.
West Texas Intermediate (WTI) is a crude oil stream produced in Texas and southern Oklahoma which serves as a reference or "marker" for pricing a number of other crude streams. WTI is the underlying commodity of the New York Mercantile Exchange's oil futures contracts.