Market Wrap 2026-02-26

Core-Brief

26 Feb 2026 — 10 min read

Market Wrap 2026-02-26

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Today's US Market Wrap — Key Points

Equities gained, led by tech; risk appetite increased.
Treasuries fell amid JGB pressure and soft auctions.
Oil prices mixed; focus on Iran talks and OPEC meeting.
Dollar weakened; AUD strengthened on inflation data.
BoJ nominations weighed on the Yen.

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MARKET OVERVIEW

SNAPSHOT: Stocks increased, Treasury values decreased, Crude oil prices were mixed, the Dollar's value declined, and Gold's value increased.
PREVIOUS TRADING DAY: The U.S. President's State of the Union address had a subdued impact. OPEC+ sources indicated a potential discussion on increasing oil production for April during a Sunday meeting. EIA data showed a larger-than-expected increase in crude oil inventories. A U.S. 5-year note auction saw weak demand. The Japanese government nominated two academics favoring reflationary policies to the Bank of Japan (BoJ). Australian inflation exceeded expectations. Zimbabwe immediately suspended all raw mineral and lithium exports.
UPCOMING: Data releases include Eurozone Consumer Confidence Final (Feb), U.S. Jobless Claims, Japanese Tokyo CPI (Feb), and Retail Sales (Jan). Events include a Bank of Korea (BoK) Policy Announcement. Scheduled speakers are Takata (BoJ), Lagarde (ECB), Lombardelli (BoE), and Bowman (Fed). Supply events include Italy and the U.S. Earnings reports are expected from CoreWeave, Intuit, Vistra Energy, Autodesk, Dell, Baidu, Warner Bros Discovery (WBD), Allianz, Deutsche Telecom, Munich Re, Schneider Electric, AXA, Engie, and Saint-Gobain.

MARKET WRAP-UP

Equities extended gains on Wednesday, building on the previous day's momentum from reduced concerns about AI disruption. The Nasdaq showed the strongest performance, with technology and financials leading the advance. The technology sector was boosted by gains in software, which had recently been affected by AI disruption, and by gains in NVIDIA (NVDA) ahead of its after-hours earnings release. The rise in equities supported overall risk appetite, with the Australian and New Zealand dollars outperforming, although higher-than-expected Australian CPI data led to the AUD outperforming other cyclical currencies. Safe-haven assets generally underperformed, with the Yen, Dollar, and Franc weakening. The Yen was sold following the Japanese government's nomination of two reflationist academics to the BoJ, reinforcing Takaichi's pro-stimulus stance, which resulted in a steepening of the JGB yield curve. Pressure on long-end JGBs and positive risk sentiment weighed on Treasury values, while the auctions of the 2-year Floating Rate Note (FRN) and 5-year notes were soft. Crude oil prices remained relatively stable as attention shifted to U.S./Iran meetings on Thursday, and OPEC sources suggested that delegates would consider resuming output increases in April. In the U.S., the EIA inventory data revealed a significant build, consistent with the private inventory report from the previous night. Gold and Silver prices increased further, and Bitcoin recovered, supporting stocks exposed to the cryptocurrency market. Lithium and related stocks gained following Zimbabwe's immediate suspension of all raw mineral and lithium exports.

US

FED'S BARKIN:

(2027 voter): Indicated a clear sense that the job market has loosened, and it is hard to calibrate what's going on with labour supply. Inflation data has been consistently above target, and he is hopeful of it retreating to 2%, but wants data to show this clearly. Monetary policy is currently well-positioned for risks.

FED'S SCHMID:

(2028 Voter): Spoke on the balance sheet, noting the main focus of the Fed balance sheet debate is about the size of reserves. However, he is concerned about the duration of it. It will take years for the Fed to run off its mortgage bond holdings, adding they will never return to a Fed balance sheet size seen before the financial crisis. Acknowledged that the Fed's T-bill reserve management has been relatively modest. The jobs market is in a pretty good place, but has work to do on the inflation side.

FED'S COLLINS:

(2028 voter): The Fed is quite likely to hold current rates for some time, policy is mildly restrictive and may be close to neutral. Recent job data has been promising, and while the job market softened last year, it wasn't soft. Wants more confidence that inflation is easing, and her baseline view is that inflation will wane later this year. The latest tariff news hasn't changed the outlook much.

FED'S MUSALEM:

(2028 voter): Said inflation is almost a full percentage point above target, and the labour market is cooling in an orderly way. His base case outlook is that the economy grows at or above 2%; and that the job market isn’t vulnerable to an increase in layoffs, nor will inflation stay higher for longer, but both could happen. Describes financial conditions as accommodative, and policy is now at neutral in real terms, which is balancing appropriately. Believes that half of the excess inflation is from tariffs, which will fade as the year progresses. Additionally, the policy government shutdown may have biased CPI downward, and could stay that way through April; PCE inflation is a better gauge. Bringing inflation down to target will help with consumption and growth, and could lower the 10yr rate.

FIXED INCOME

T-NOTE FUTURES (H6) SETTLED 4 TICKS LOWER AT 113-05+
Treasury notes settled lower across the curve after being pressured by JGBs, risk sentiment and soft auctions.
At settlement:
- 2-year +1.5bps at 3.471%
- 3-year +2.3bps at 3.484%
- 5-year +2.3bps at 3.619%
- 7-year +1.9bps at 3.812%
- 10-year +1.7bps at 4.050%
- 20-year +0.8bps at 4.638%
- 30-year +0.5bps at 4.694%
THE DAY:
- Treasury notes experienced gradual downward pressure overnight, seemingly tracking long-end JGBs lower as traders question PM Takaichi's reflationist policies with the JGB curve steepening on stronger growth prospects. It was reported overnight that the Japanese government had recommended two academics to the BoJ board, who SBI Securities describes as "staunch reflationists". The pressure in JGBs weighed on USTs slightly overnight, but the downside began to pare during the US session in quiet trade amid a lack of data. Attention turned to the 5-year auction, which ultimately was relatively soft, following the soft 2-year note auction on Tuesday, and a soft 2-year FRN during Wednesday's session. Fed speak meanwhile saw Schmid speak on the balance sheet, noting the main focus of the balance sheet debate is about the size of reserves, while he said he is concerned about the duration of the Fed balance sheet. Away from fixed income, focus largely turns to NVIDIA (NVDA) earnings after-hours to dictate risk sentiment.
SUPPLY
- Bills
  - The U.S. sold 17-week bills at a high rate of 3.590%, with a bid-to-cover ratio of 3.20x.
  - The U.S. will sell USD 105bln in 4-week bills and USD 95bln in 8-week bills on February 26th, settling on March 3rd.
- Notes
  - Overall, another relatively soft auction. The U.S. sold USD 70bln of 5-year notes at a high yield 3.615%, lower than the prior high yield of 3.823% and tailing the when issued by 0.7bps, a larger tail when compared to the prior and six-auction-average of 0.3bps. The bid-to-cover of 2.32x, a touch below the prior 2.34x and 2.36x average. Direct demand fell to 24.7% from 28.5%, below the 28.5% average, while indirect demand rose to 62.5% from 60.7%, above the 61.4% average. This left dealers with 12.8% of supply, above the 10.8% prior and 10.1% average.
  - The U.S. sold USD 28bln of 2-year FRNs at a high discount margin of 0.099%, with a bid-to-cover ratio of 2.01x.
  - The U.S. will sell USD 44bln of 7-year notes on February 26th, settling on March 2nd.
- STIRS/OPERATIONS
  - Market Implied Fed Rate Cut Pricing:
    - March 0bps (previous 0bps)
    - April 2.7bps (previous 2.7bps)
    - June 10.8bps (previous 12bps)
    - December 52.3bps (previous 54.8bps)
  - NY Fed RRP op demand at 1.16bln (prev. 0.92bln) across 7 counterparties (prev. 17) on February 25th
  - SOFR at 3.67% (previous 3.66%), volumes at USD 3.239tln (previous USD 3.197tln) on February 24th
  - EFFR at 3.64% (previous 3.64%), volumes at USD 106bln (previous USD 97bln) on February 24th
  - Treasury Buyback: (Liquidity Support, 1 to 10-year TIPS, max. USD 750mln): Buys USD 745mln of 2.291bln offered, O/C 3.08x; accepts 12 of 28 eligible issues

CRUDE OIL

WTI (J6) SETTLED USD 0.21 LOWER AT USD 65.42/BBL; BRENT (J6) SETTLED USD 0.08 HIGHER AT USD 70.85/BBL
Crude oil prices showed mixed performance on Wednesday, with Brent slightly higher and WTI lower, as significant inventory builds in the U.S. prevented WTI from rising.
Regarding geopolitics, attention is turning to talks between Iran and the U.S. in Geneva, starting tomorrow, while the Iranian Foreign Minister continues to state that if the U.S. attacks Iran, any U.S. bases in the region will be legitimate targets. As we enter the talks, Energy Secretary Witkoff said any nuclear deal should last indefinitely. However, the U.S. imposed sanctions on over 30 entities that support Iranian oil and weapons sales today, increasing pressure on the regime ahead of talks on Thursday. The focus of the day, however, was on OPEC reports ahead of the 1st March meeting and inventory data. The weekly EIA inventory report saw huge builds; crude stocks surged to a build of 16mln bbls from the prior draw of 9mln, well above the 1.8mln forecast, but perhaps not too surprising given the private inventory report Tuesday night, which forecasted a build of 11mln bbls. Gasoline stocks drew, while Distillate stocks were little changed. Meanwhile, on OPEC, sources report that some OPEC+ delegates expect the group to agree to resume modest production increases this Sunday regarding its April policy decision, and apparently, a 137k BPD oil output increase will be considered.

EQUITIES

CLOSES:
- SPX +0.81% at 6,946
- NDX +1.41% at 25,329
- DJI +0.63% at 49,482
- RUT +0.41% at 2,663
SECTORS:
- Industrials -0.79%
- Real Estate -0.69%
- Consumer Staples -0.58%
- Materials -0.43%
- Energy -0.42%
- Health -0.02%
- Utilities +0.36%
- Consumer Discretionary +0.48%
- Communication Services +0.97%
- Financials +1.68%
- Technology +1.79%
EUROPEAN CLOSES:
- Euro Stoxx 50 +0.91% at 6,172
- Dax 40 +0.74% at 25,171
- FTSE 100 +1.18% at 10,806
- CAC 40 +0.47% at 8,559
- FTSE MIB +1.11% at 47,170
- IBEX 35 +1.49% at 18,461
- PSI +0.29% at 9,296
- SMI -0.10% at 13,983
- AEX +1.00% at 1,030
STOCK SPECIFICS:
- Oracle (ORCL) was upgraded at Oppenheimer to 'Outperform' from 'Perform'.
- IBM (IBM) was upgraded at UBS to 'Neutral' from 'Sell'.
- Warner Bros Discovery (WBD) said Paramount Skydance (PSKY) offer could be 'Superior' to Netflix (NFLX).
- Kroger (KR) was downgraded at Wells Fargo to 'Equal Weight' from 'Overweight'.
- Lowe's (LOW): FY guidance light
- HP Inc. (HPQ): Weak guidance as it expects volatility in memory chips to persist even into next year & forecasts a slump in its PC shipments
- Workday (WDAY): Weak next Q & FY outlook
- First Solar (FSLR): Profit light w/ dismal guidance
- Circle Internet Group (CRCL): EPS and revenue beat
- Axon Enterprise (AXON): Surprise quarter profit alongside revenue beat and strong FY26 revenue growth outlook
- Oddity Tech (ODD): Expects Q1 revenue to decline 30% Y/Y
- Joby (JOBY) is partnering with Uber (UBER) to launch Uber Air, allowing users to book Joby’s all-electric air taxis directly in the Uber app.
- A White House Official says Amazon (AMZN), Google (GOOGL), and Oracle (ORCL) are to sign data centre agreements, Fox News reports.
- Google (GOOGL) will reportedly test changes to its search engine results following EU antitrust charges, will apply initially to searches for lodgings, according to reports
- China's Deepseek withholds upcoming model from Nvidia (NVDA) and AMD (AMD), according to reports.

FX

The Dollar was broadly weaker against peers on Wednesday, with Trump's State of the Union speech sparking little reaction as new policies were absent. US equities continued to bounce as tech sentiment improved ahead of Nvidia earnings after the close, likely building risk-taking in higher beta FX. Tier 1 US data was absent today, and Fed speak contained little on upcoming policy decisions. US yields were firmer across the curve, albeit seemingly tracking with a move higher in JBG yields on reinflationary views of new BoJ members, yet the USD failed to follow. DXY moved lower to ~ 97.70 from 97.85
G10 strength vs USD was led by AUD, which found upside on the hotter-than-expected inflation report. Y/Y printed 3.8% (exp. 3.7%) and M/M was 0.4% (exp. 0.3%). AUD/USD peaked at 0.7124, nearing multi-year highs of 0.7147, with the rally in precious metals adding support. Other cyclical currencies outperformed, NZD/USD broke back above 0.60, and Cable climbed to ~1.3553 from 1.3485.
JPY was weighed by PM Takaichi's nominations of Ayano Sato and Toichiro Asada to the BoJ policy board, individuals viewed as reflationary and dovish. As such, short-end JBG yields were lower on the prospects of looser policy in the near term, while it further emphasised Takaichi's distaste towards further rate hikes, while the long-end yields rose on longer-term growth outlooks. Gradual weakness continues amid concerns over US-Japan relations in response to a Nikkei report that Japan's FTC conducted an on-site inspection of Microsoft (MSFT) on suspicion of violating the Antimonopoly Act. USD/JPY peaked at 156.82 before paring to ~156.37.