Market Update February 2026: Your Stock Market News
February was marked by rising tensions between the US and Iran, which escalated at the end of the month. After U.S. and allied strikes, Iran threatened and disrupted shipping around the Strait of...
February was marked by rising tensions between the US and Iran, which escalated at the end of the month. After U.S. and allied strikes, Iran threatened and disrupted shipping around the Strait of Hormuz, a key route for global oil supplies. The disruption pushed oil prices higher and increased geopolitical risk premia in energy markets.
Equity markets saw a rotation away from parts of the US technology sector toward energy and cyclicals, while higher oil prices weighed on fuel-sensitive industries. Bond markets remained supported by easing inflation in the US and Europe, although political developments around central bank leadership attracted attention. Commodities, particularly oil and gold, benefited from the rise in geopolitical uncertainty.
Geopolitical Developments
February 2026 combined a series of policy and security headlines that mattered for markets mainly through risk premia rather than a broad downgrade of the global growth outlook.
Kevin Warsh was appointed at the end of January as the next Federal Reserve Chair in May 2026. The discussion kept attention on central-bank independence and contributed to episodes of USD and gold volatility during the month. On trade, United States and India announced a bilateral agreement in early February that reduced reciprocal tariffs and included commitments for India to increase purchases of U.S. goods, including energy.
In Europe, the institutional landscape shifted as Banque de France Governor François Villeroy de Galhau announced his departure for June 2026, while reports suggested ECB President Christine Lagarde could leave before the end of her term. Although monetary policy remains unchanged, succession risk gained prominence as inflation cools and the debate shifts from “how restrictive” to “for how long.”
In Asia, Japan’s Prime Minister Sanae Takaichi secured a strong mandate in a snap election, reinforcing expectations of a pro-growth agenda. Meanwhile, markets continued to assess the EU–India free trade agreement, with attention turning from its political conclusion to ratification and implementation.
The most impactful event throughout February and beginning of March was the US-Iran conflict. During the whole month there were elevated tensions with a concrete escalation during the last days, beginning March with uncertainty. The conflict intensified concerns around shipping routes and potential supply disruptions. Iran has effectively halted shipping around the Strait of Hormuz and threatened attacks on vessels after U.S. and allied strikes. This has severely disrupted tanker traffic and pushed maritime insurance costs and freight rates sharply higher, triggering a near-standstill in this critical oil route carrying around a fifth of global supplies. Brent Oil prices incurred a sharp increase after the attack from the United States, contributing to the already present trend of risk premium embedded in energy markets.
Market Developments by Asset Class
Equities
Equity markets navigated February with a clear rotation beneath the surface. After several years of dominance by US mega cap technology and AI related companies, investors began to question the durability of parts of the software business model as generative AI tools improved rapidly. This led to a sell off in segments of the US software space, while value and cyclical sectors such as energy and industrials gained relative strength.
The escalation of the US-Iran conflict at the turn of the month added geopolitical pressure. The reaction in the broad US indices remained relatively contained, supported by solid domestic fundamentals. Sector moves were more pronounced. Energy and defense stocks advanced, whereas airlines and other fuel sensitive industries weakened as oil prices surged. Israel’s stock exchange, by contrast, rose by around 35 percent during February and early March and showed notable resilience despite regional tensions.
Outside the US, the tone was constructive for most of the month. European equities benefited from stabilising activity data and easing inflation dynamics, although higher oil prices created renewed cost concerns toward month end. Emerging markets attracted renewed interest as valuation gaps versus developed markets remained wide. Oil importing countries, however, faced pressure from the rise in energy prices, with European indices suffering a decline in value.
In Switzerland, the picture remained mixed. Defensive sectors such as healthcare and consumer staples provided stability. At the same time, the stronger Swiss franc, supported by safe haven flows, weighed on exporters and internationally exposed cyclical companies.
Bonds
Fixed income markets continued to balance disinflation against higher term premia and supply dynamics. In the US, January CPI (released in February) showed inflation easing to 2.4% year-on-year, supporting the view that price pressures are moderating. At the same time, political noise around the Fed leadership transition increased investors’ sensitivity to the ‘independence premium’ embedded in long-dated Treasuries.
In the euro area, inflation eased to 1.7% in January, taking pressure off the ECB on the inflation front. At the same time, leadership newsflow (Villeroy’s early departure and Lagarde succession speculation) increased focus on the institutional setting for future policy decisions.
In Switzerland, January inflation (reported in mid-February) remained low at 0.1% year-on-year and the SNB kept its policy rate at 0%. Low inflation and a strong franc reinforced the market’s expectation that Swiss rates will remain low, while global risk-off episodes continued to generate demand for high-quality CHF duration.
Real Estate (Switzerland)
Swiss real estate continued to benefit from supportive financing conditions and structurally limited supply, even as price momentum in residential markets showed signs of slowing. February highlighted resilient demand for owner-occupied housing and differentiated fundamentals across segments, with prime residential assets remaining more robust than secondary commercial stock.
The stabilisation of interest rates improved valuation visibility for both direct property and listed vehicles, although performance dispersion remained meaningful between prime assets and secondary locations. Residential rents for new leases continued to edge higher in urban centres where supply is constrained, while commercial real estate remained more selective: well-located, high-quality properties held up better than secondary office and retail stock.
Listed Swiss real estate remained sensitive to long-term yields, but the combination of scarce supply, stable cash flows and a lower inflation regime continued to underpin the asset class’ role as a diversifier in CHF portfolios.
Commodities
Commodities regained prominence in February as both cyclical and defensive drivers aligned. Growth indicators improved modestly across several regions, but the key catalyst was the re-emergence of geopolitical risk premia.
Brent crude oil rose sharply in late February and early March 2026 as geopolitical tensions in the Middle East escalated into open conflict. Throughout February, prices had already been trending higher amid rising regional tensions and uncertainty surrounding U.S.–Iran relations. The situation intensified on 28 February following coordinated military strikes, and in early March Iran effectively halted shipping traffic around the Strait of Hormuz and threatened attacks on vessels in the area. Brent moved decisively above the USD 80 per barrel mark in volatile trading, reflecting a sharp increase in the geopolitical risk premium and growing fears of physical supply disruption.
Unlike previous episodes driven mainly by precautionary pricing, this escalation led to tangible disruptions in tanker traffic, sharply higher insurance premiums and rising freight rates. Even without a formal blockade, the effective reduction in available shipping capacity tightened perceived supply conditions. Energy markets began to price a higher probability of prolonged supply constraints, which kept crude prices elevated and increased volatility across the broader oil complex, including refined products.
Precious metals also benefited. Gold extended its run of monthly gains amid heightened geopolitical uncertainty and intermittent concerns about institutional credibility, reaffirming its role as a portfolio hedge when headline risk is elevated.
Everon Strategies and Portfolio Positioning
Income Strategy
Our income strategies have started the year 2026 solidly. In Switzerland, the strategy is up nearly 2% since the beginning of the year and has outperformed both the SMI and the iShares Swiss Dividend ETF. The drivers of performance were disciplined stock selection as well as the consistent equal weighting of positions, which enables broader market coverage. Particularly positive developments were seen in Banque Cantonale Vaudoise and Vontobel, among others.
Internationally, the picture is also encouraging. The European income strategy is up around 4–5%, while the US strategy has performed particularly strongly with >6% return. In the US, especially high-dividend stocks benefited, as well as the deliberately broader mid-cap coverage, which opens up additional sources of diversification and returns.
Multifactor Strategy
The multifactor strategies have also developed positively since the beginning of the year and were able to slightly outperform the main benchmarks. Particularly in Switzerland, a strong relative development can be observed.
Similar to the income strategies, the broader market coverage has also proven advantageous here. The approach combines several factors such as valuation, quality, momentum and risk in a diversified portfolio and benefits particularly in phases in which market leadership is distributed across more companies.
The development at the beginning of the year confirms that diversification and active stock selection are gaining importance in an environment of increasing market dispersion. Our strategies are deliberately constructed so that they are not dependent on a few index heavyweights. This broad and disciplined investment philosophy will also remain the foundation for stable and attractive long-term returns in 2026. The start to a successful 2026 has thus already been achieved.
This article is for general information purposes only and does not constitute investment advice or an offer to buy or sell financial instruments. Everon AG is a wealth manager licensed by FINMA under FinIA. Past performance is not a reliable indicator of future returns.