For a holiday-shortened trading week, the third week of February 2026 was as jam-packed with news with market-moving potential as any we've ever seen. Yet the S&P 500 (Index: SPX) closed out the week ending Friday, 20 February 2026 at 6,909.51, up a little over one percent from its previous week's close. Coincidentally, that's about one percent below its record high recorded back on 27 January 2026.

That outcome came about because the week's biggest market-moving news headlines were mixed. Most of that news hit on Friday, when the U.S. Supreme Court ruled that the law under which President Trump established his administration's global tariff program does not permit him to impose tariffs.

That was generally good news for many companies in the S&P 500, which do quite a lot of worldwide business, but was tempered by the Trump administration's announcement it would impose replacement tariffs of similar magnitude under other provisions of U.S. law, many of which have previously been tested in court.

Friday also saw a hot Personal Consumption Expenditure inflation number, which is a negative for markets because higher-than-expected inflation lowers the odds of interest rate cuts. While the CME Group's FedWatch Tool continued projecting the Fed will keep holding the Federal Funds Rate steady until 17 June (2026-Q2), it now gives a 59% probability of a quarter point rate cut happening then, down from the previous week.

Looking further forward, the tool gives a 73% probability that another next quarter point reduction will take place on 16 September (2026-Q3). No other interest rate changes are expected in 2026, which is perhaps the biggest change from the previous week.

Overall, stock prices rose from the previous seek, which is captured on the latest update of the alternative futures chart. We've added a new redzone forecast range to the chart to compensate for the echoes of past volatility caused by last year's DeepSeek AI shock event and President Trump's "Liberation Day" tariff announcement some two weeks later, which both generated a lot of volatility for stock prices.

We're assuming investors will remain focused on the upcoming future quarter of 2026-Q2 during this period, given the potential for the Fed's June 2026 rate cut to possibly slip into the third quarter. We've anchored the start of the redzone forecast range on the alternative futures chart's projection for 2026-Q2 on 19 February 2026, while the other end of the range will float with the expectations for the dividend futures-based model's projected 2026-Q2 trajectory on 28 May 2026, which roughly corresponds to when the shocks from the DeepSeek and Liberation Day noise events subsided.

Here are the other market-moving headlines from the week that was:

Tuesday, 17 February 2026

• Signs and portents for the U.S. economy:
• Oil prices slide 2% to two-week low on talk of progress in US-Iran talks
• 'Exports to China look dismal,' leader of busiest US seaport says
• Fed minions worry about inflation despite hitting the target at which they're really aiming, see rates coming down later in 2026:
• Fed's Daly says US central bank still needs to get inflation down
• Fed must dig deep on AI impact to make right rate calls ahead, Daly says
• Fed's Daly says businesses 'cautiously optimistic'
• Fed's Goolsbee: 'Several' rate cuts possible this year if inflation gets on track to 2%
• Fed's Barr says central bank likely on hold for some time as it watches for easing inflation
• Bigger stimulus developing in China:
• Winter economy emerges as poster child for China's stimulus tilt to services
• Growth signs developing in Japan:
• Japan exports jump, business mood improves as IMF warns of risks to growth
• ECB minions excited to expand their bailout business:
• ECB opens up euro lifeline in bid to boost global role
• Wall Street ended slightly higher as investors came back from holiday
• Wall Street ends down as AI worries slam tech stocks
• Big tech stocks lose billions as AI spending fears hit valuations

Wednesday, 18 February 2026

• Signs and portents for the U.S. economy:
• US manufacturing output posts biggest gain in 11 months in January
• Oil gains as traders weigh progress in Russia-Ukraine and US-Iran talks
• Big Food pours millions into rebrands as obesity drugs reshape US demand
• Fed minions want to see inflation fall below level they've been targeting before more rate cuts:
• Fed minutes: Lower inflation needed before many officials will support rate cuts
• Fed minutes downplay impact of Trump mortgage buying on housing affordability
• Fed minutes show officials grappling with policy split, impact of AI on economy
• BOJ, JapanGov minions to work closely together as government set to boost borrowing:
• Japan PM Takaichi hopes BOJ works closely with government to durably hit price goal
• Exclusive: Japan's debt issuance to surge 28% in fiscal 2029 from 2026, finance ministry estimates
• Chief ECB minion to quit sooner rather than later starting succession battle among other minions, while some are in the dark:
• ECB President Lagarde plans to quit before Macron's term ends, FT reports
• ECB succession talk puts Knot and De Cos in frame for top job
• ECB’s Cipollone has no indication President Lagarde plans early resignation
• Wall Street ended higher as tech stocks regained momentum
• Wall Street ends higher, lifted by Nvidia and other AI stocks

Thursday, 19 February 2026

• Signs and portents for the U.S. economy:
• Oil prices extend gains on concern over potential US-Iran conflict
• US crude and fuel stocks fall on stronger demand from refineries, consumers, EIA says
• Las Vegas sees sharp visitor drop as leisure spending wanes
• Fed minions claim their policy is "in a good place", object to criticism from White House officials:
• Fed policy is in a good place, Daly says
• Fed's Kashkari: Hassett comments about Fed researchers represent another attack on independence
• Bigger trouble, stimulus developing in China:
• How China plans to dominate global trade long after Trump
• BOJ minions next rate hike may have consequences:
• Japan may see upheaval of funds when BOJ hikes rates to 1%, economist says
• Chief ECB minion claims she isn't quitting early:
• Exclusive: ECB's Lagarde signals no imminent exit as politics and central banks collide
• Eurozone economy claimed to be negatively impacted by trade with China:
• German business lobby warns of unfair trade practices by China
• China shock: Will Merz take on Germany's top rival?
• Dow, S&P 500, Nasdaq slip as oil prices continue rally amid Iran-US tensions
• Wall Street ended lower after Walmart earnings and further economic data arrived
• Walmart outlines 6% to 8% operating income growth for FY27 as automation and AI adoption accelerate
• Top of the world: Amazon outsells Walmart to become the largest company
• Wall Street ends down as Nvidia slides and private equity stocks sink
• Blue Owl shares slide again as latest capital-return plan unnerves some investors
• The S&P 500 is undergoing a historic shift that could reshape the stock market

Friday, 20 February 2026

• Signs and portents for the U.S. economy:
• Government shutdown dents US economic growth in fourth quarter; inflation heats up
• US Supreme Court strikes down Trump's global tariffs
• Trump unveils new 10% global tariff after 'deeply disappointing' SCOTUS ruling
• Trump’s new 10% global tariff to take effect on Feb. 24
• US new home sales fall in December; inventory declines
• White House proposes banning some investors from buying more homes, WSJ reports
• US PCE inflation heats up in December
• Fed minions keep claiming monetary policy is perfect, worry about GDP growth being too strong:
• Fed's Logan sees inflation easing, says rate policy 'well positioned' for risks
• Fed's Bostic: 'Pretty strong' GDP growth raises inflation concerns
• ECB minions excited for Eurozone to keep importing China's deflation, chief ECB minion claims she'll serve out full term:
• ECB's Panetta says Chinese imports helped drive sharper than forecast inflation drop
• Lagarde dampens ECB exit talk, says she expects to finish her term
• Wall Street finished higher as market participants assessed GDP and PCE data
• Wall Street ends higher after Supreme Court rules against Trump tariffs
• AI-related stocks edge higher, led by networking, while CoreWeave drags hyperscalers down

The BEA's first estimate of real GDP growth for 2025-Q4 came in at +1.2%, which is quite a bit lower than the Atlanta Fed's GDPNow tool's projection of +3.7% growth during that quarter, with the Senate Democrats' government shutdown fiasco accounting for most the difference. The GDPNow tool is now projecting real GDP growth for 2026-Q1 with an initial forecast of +3.1% growth.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull who is happy the U.S. Supreme Court struck down some tariffs as unconstitutional and a bear who is nervous about the new tariffs that will replace them".