Economic Surprises, Hawkish Fed and Resilient Equities in a Volatile Week
February 23, 2026
The holiday-shortened week featured a Supreme Court decision on tariffs, Federal Reserve (Fed) minutes, gross domestic product (GDP) and inflation data, as well as rising oil and gold prices amid heightened geopolitical tensions. The Fed minutes were more hawkish than expected, with the possibility of rate hikes mentioned. Despite this, the 10-year Treasury remained in a narrow range throughout the week and closed at 4.09%, up four basis points.1 The first look at fourth quarter GDP came in below expectations at 1.4%;2 however, markets shrugged it off due to the government shutdown during the quarter. Inflation data also pointed in the wrong direction, with core Personal Consumption Expenditures (PCE) at 3.0%, accelerating from the prior quarter and higher than expectations.3 The labor market data was supportive as weekly jobless claims fell to 206,000,4 a five-week low and below estimates.5 Equity markets rallied following the Supreme Court decision that the International Emergency Economic Powers Act (IEEPA) does not authorize broad tariffs. The S&P 500 Index turned positive again for the year after it was up 1.11% for the week.6 Credit markets remained constructive as spreads grinded tighter.7
In the week ahead, expect more technology and hyperscaler capital expenditure (capex) details to be announced along with Nvidia earnings.8 The economic calendar is relatively light, highlighted by the Producer Price Index (PPI) scheduled for release on Friday.9 Investors are expecting an increase of 0.3% month-over-month.10 Several Fed officials are scheduled to speak, while Treasury auctions should be watched given their potential market impact. Beneath the surface, volatility has been elevated, and investors will be watching closely to see what the final week of February brings.
Sources:
1-4,6,7Bloomberg
5Reuters – US weekly jobless claims fall more than expected amid labor market stability; 2/19/26
8Kiplinger – Earnings Calendar and Analysis for This Week (February 23-27); as of 2/23/2026
9,10MarketWatch – Economic Calendar; as of 2/23/2026
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