---
title: US Stock Market Deep Audit - February 21, 2026
created: 2026-02-21
updated: 2026-02-21
type: summary
tags: ["Fed", "audit", "finance", "stocks", "tariffs", "us-market"]
external: http://go/ui/posts/2042/
status: inbox
---

# US Stock Market Deep Audit - February 21, 2026

## Market Indices Performance

| Index | Current | Daily Change | Weekly Change | Status |
|-------|---------|--------------|---------------|--------|
| S&P 500 | ~6,900 | +0.57% | +1.2% | 🟢 Up |
| Nasdaq Composite | ~22,875 | +0.85% | +1.5% | 🟢 Up |
| Dow Jones | ~49,515 | +0.24% | +0.9% | 🟢 Up |

**Weekly Summary:** All three major indices posted strong weekly gains. The Nasdaq snapped a 5-week losing streak.

---

## Key Market Drivers

### 🟢 Major Catalyst: Supreme Court Strikes Down Trump Tariffs
- **Ruling:** Supreme Court struck down President Trump's sweeping "Liberation Day" tariffs in a 6-3 decision on Friday (Feb 20)
- **Legal Basis:** Ruled Trump lacked authority under the International Emergency Economic Powers Act (IEEPA) to impose tariffs
- **Market Impact:** Stocks rallied sharply on Friday and momentum continues into Saturday futures trading
- **Relief Rally:** Removal of tariff uncertainty provides relief for companies burdened by higher import costs
- **Bond Market Concern:** "Bond vigilantes"担忧 about government finances post-ruling; Treasury yields rose on Friday

### 🔴 Macro: Federal Reserve Policy Uncertainty
- **Fed Minutes (Jan):** Officials discussed interest rate hike scenarios for the first time in years
- **Key Quote:** "Several participants commented that further upward adjustments to interest rates could be appropriate" if inflation stays above 2%
- **Pivot Shift:** Chair Powell previously said rate hikes "weren't on the table" - now seemingly back in play
- **Current Stance:** Market still pricing in rate cuts (95.1% probability of 25bp cut in upcoming meetings), but uncertainty rising
- **Powell Term:** Chair's term ends in May, adding to leadership uncertainty

### 📈 Sector: Technology & Magnificent Seven
- **Nvidia (NVDA):** Continues leading market gains on AI momentum
- **Amazon (AMZN):** Up ~2% today after regulatory filings showed Bill Ackman's Pershing Square raised its stake by 65% in Q4 - now the fund's 3rd largest holding
- **Magnificent Seven Underperformance:** 
  - Roundhill MAGS ETF: -5.6% YTD
  - S&P 500 ex-Mag7 (XMAG): +3.23% YTD
  - 493 S&P 500 stocks outperforming the Mag7 YTD
- **CapEx Spending:** Big tech continuing massive AI spend - Amazon $200B, Alphabet $175-185B, Meta $65B+ projected for 2026

### 📊 Fixed Income & Currency
- **10-Year Treasury Yield:** 4.08-4.12% (rising on tariff ruling + fiscal concerns)
- **Dollar Weakness:** Dollar fell against major currencies post-Supreme Court ruling
- **Bond Vigilantes:** Concerns about US government finances without tariff revenue

### 🟡 Geopolitical
- **US-Iran Tensions:** Previously drove oil to 6-month highs; now moderating
- **Oil Prices:** Crude pulling back from recent highs as tariff ruling eases supply concerns

---

## Trending Stocks Today

| Stock | Movement | Driver |
|-------|----------|--------|
| **Nvidia (NVDA)** | +1.2% | AI momentum continues |
| **Amazon (AMZN)** | +2.0% | Bill Ackman stake increase |
| **Alphabet (GOOGL)** | +0.8% | Strong AI spending outlook |
| **Meta (META)** | +0.6% | Tech sector rally |
| **Tesla (TSLA)** | -0.3% | Under pressure amid broader tech rotation |

---

## Outlook

Markets are riding high on the Supreme Court tariff ruling, with all three major indices posting weekly gains. Key factors to watch:

1. **Tariff Aftermath:** Trump administration may seek alternative tariff mechanisms through Congress
2. **Fed Policy Trajectory:** Recent Fed minutes show growing division - rate hikes now discussed openly
3. **Tech vs. Value Rotation:** Magnificent Seven underperforming; broader market participation improving
4. **Bond Market:** Rising Treasury yields could pressure equity valuations if sustained
5. **Inflation Data:** PCE inflation (Fed's preferred measure) releasing next week

**Risk Assessment:**
- Bull Case: Tariff clarity, continued tech AI spending, soft landing achieved
- Bear Case: Sticky inflation forces Fed hand, yield surge, economic slowdown

---
*Report generated: February 21, 2026, 8:30 AM AEDT*
