In the early hours of Saturday, February 28, 2026 the United States and Israel attacked Iran to liberate the people from the tyranny that they have faced for 47 years.
The Dow Jones Industrial Average fell 1.3% in last week’s stock market trading. The S&P 500 index declined 0.4%. The Nasdaq composite lost 0.95%. The small-cap Russell 2000 sank 1.2%.
The Producer Price Index (PPI) for January came in surprisingly hot and dragged equities down as February trade wrapped up.
Consumer confidence improved on better short-term expectations while still being restrained by concerns about prices.
The S&P 500 index dropped 0.9% in February, its second monthly decline in three, but it remains up 0.5% for the year.
The Dow Jones Industrial Average fell 1.1% Friday, but still managed to notch a 0.2% monthly gain.
With the S&P 500 erasing gains after recapturing the 50-day line Wednesday, Investors Business Daily is reducing its recommended equity exposure to the 40%-60% level. They advise that investors pare down exposure at a measured rate and trim their weakest stocks first.
Give me a call or reply to this email to discuss whether changes should be made to your allocation. 267-970-4755.
The 10-year Treasury yield fell seven basis points to 3.95%, as the yield curve flattened.
West Texas Intermediate futures popped 3.1% last Friday, to $67.26 per barrel. Oil prices rose in anticipation of the pending attack on Iran.
Uncertainty around tariff policy; concerns about artificial intelligence’s (AI’s) impact on select industries and the broad economy; a resurgence of inflation concerns; geopolitical concerns; and corporate earnings reports were all contributing factors to last week’s volatility.
Factory orders showed a concentrated decline while the federal housing finance agency FHFA house price index indicated that price increases moderated in 2025.
Looking ahead this week, investors will be focused on the February jobs report along with other labor market updates, including the ADP Employment Report and Challenger Job Cuts. Another key update will be February manufacturing and services Purchasing Managers’ Indexes (PMIs) from the Institute for supply management (ISM).
Click the Looking Ahead link below and you will find a report written by Wells Fargo Investment Institute. Below are excerpts from that research.
Week in review: February 23-27
Economic data
- PPI inflation for January came in above consensus, expectations, and triggered renewed inflation concerns.
- The headline inflation print came in at 0.5% month-over-month and 2.9% year-over-year. Core inflation rose 0.8% month-over-month and 3.6% year-over-year.
- Notably, details of the report signaled rising upstream inflation pressures. Specifically, services inflation increased significantly up 0.8% month-over- month, which was partially offset by goods deflation (down 0.3%). However, the less-volatile core goods component saw a similarly outsized increase (0.7%) and suggested broad-based price pressures.
- The Conference Board’s Consumer Confidence Index for February increased slightly 91.2, driven by an improvement in consumers’ short-term outlook for income, business and labor market conditions
- Overall, consumers’ expectations remain somewhat depressed, and well below perceptions of present conditions. Many respondents cited prices, inflation, and the cost of goods as concerns.
- The share of consumers saying jobs were plentiful as well as those saying jobs were currently hard to get both climbed, pointing to uneven conditions across different areas of the labor market.
- Factory orders for December declined 0.7% month-over-month, with lower commercial aircraft bookings offsetting demand improvements in other areas, notably AI related orders.
- The FHFA’s House Price Index showed that while affordability concerns persist, price increases have been gradually easing.
- House prices rose 1.8% year-over-year for December, representing a moderation over the past year in comparison to the 2023 -2024 period, with its price increases of 4.9%. Further, annual house price appreciation over the prior four-quarter period has slowed significantly since the July 2021 high of 18.9%.
- Construction spending for December increased 0.3% month-over-month, though it ended the year slightly down as activity stalled in 2025.
Looking Ahead to this week: March 2-6
U.S.
- Investors will be watching the developments with the war in Iran.
- February PMIs for manufacturing and services will be released from the ISM.
- On Friday, January retail sales and the February jobs report will be revealed. Earlier in the week we will get the ADP survey of private employment and Challenger job cuts.
- Rounding out the docket are the Fed’s March Beige Book survey of regional economic conditions at midweek; January’s consumer credit, along with export and import prices for the month; December‘s business inventories; and preliminary Q4 non-farm productivity and unit labor costs.
Asia
- In China, the National People’s Congress begins on Thursday, while private and official government releases of February PMIs for both the manufacturing and service sectors will also be in focus.
- From Japan, watch for February’s monetary base and PMIs, January’s jobless rate, and Q4 Spending.
- Elsewhere in the region, Australia’s fourth-quarter, gross domestic product (GDP), January trade balance, and building approvals, and finalized February PMI hit the tape, along with South Korea’s, January industrial production, February consumer price index (CPI) price, and it’s February manufacturing PMI.
Europe
- In Europe, the highlight will be regional finalized February PMIs, along with the euros zones preliminary February CPI, January, PPI, and employment rate, and finalized fourth-quarter GDP and employment.
- German releases include January, retail sales and factory orders, while France releases its industrial production.
- From the U.K., look for February house prices and January mortgage approvals.
As we enter this week, our thoughts remain with the brave men and women of our Armed Forces serving abroad. We honor their commitment to protecting our way of life and their tireless efforts in their vital mission in the Middle East.
