Stock Focus Report – Market Analysis for February 20, 2026

Markets closed Friday’s session in the green, shaking off some weak economic data thanks to a massive legal development. The S&P 500 added 0.69% to 6,909.51, the Nasdaq climbed 0.81% to 22,866.07, and the Dow gained 0.47% to close at 49,625.97. All three major indexes notched solid gains despite GDP numbers that fell short of expectations.

The Supreme Court delivered the session’s biggest catalyst, ruling that President Trump exceeded his authority by using a 1977 law to impose his broad tariff regime. The decision sent e-commerce stocks soaring as investors anticipated relief from trade headwinds. Amazon (AMZN), Etsy (ETSY), eBay (EBAY), and Shopify all surged on the news, leading the retail sector higher.

Not everything sparkled today. Q4 GDP growth came in at just 1.4%, well below the 2.5% forecast and signaling economic deceleration. Core PCE prices were expected to rise 3% year-over-year in December, keeping inflation concerns alive even as growth slows. The mixed macro backdrop didn’t stop buyers from piling into tariff-sensitive names.

The tariff reversal dominated sector rotation today, with e-commerce and retail leading the charge. The Supreme Court’s decision doesn’t prevent Trump from imposing tariffs through other mechanisms, but it invalidates the current structure, creating uncertainty about what comes next. For now, investors are treating it as a net positive for consumer-facing businesses that rely on global supply chains.

Energy stocks caught a bid as oil prices surged to six-month highs following Trump’s warning to Iran. The president gave Tehran 10 to 15 days to strike a nuclear deal or face “really bad things,” escalating geopolitical tensions. Oil ETFs like BNO, DBO, and GUSH rallied as crude pushed higher on the potential supply disruption.

Gold continued its remarkable run, trying to establish support above the $5,000 mark despite recent volatility. Safe-haven demand remains elevated as investors juggle slowing growth, sticky inflation, and now fresh Middle East tensions. Gold ETFs including AAAU, BAR, and DBP attracted flows as the precious metal’s momentum builds.

Investor sentiment today felt like relief with a side of caution. The tariff ruling removed one layer of uncertainty, even as it raises questions about what trade policy looks like going forward. E-commerce bulls are celebrating, but macro-focused traders can’t ignore that 1.4% GDP print, which suggests the economy is losing steam faster than expected.

The volatility in individual names tells a more dramatic story. GRAIL (GRAL) absolutely cratered, dropping nearly 50% in premarket trading after its three-year cancer screening trial failed to meet its primary endpoint. A $243 million verdict against Tesla (TSLA) for a fatal Autopilot crash was upheld by a federal judge, though the stock held relatively steady. Lucid (LCID) announced a 12% workforce reduction to improve margins and support long-term growth.

Treasury yields ticked higher across the curve, with the 10-year adding 3 basis points to 4.09%. The modest rise suggests bond traders aren’t panicking about the weak GDP number yet, possibly because they’re waiting to see if it’s a trend or a blip. The dollar gained slightly to 97.75, while Bitcoin edged up 0.83% to $67,638.

Today’s session highlighted how quickly the narrative can shift when the Supreme Court weighs in on economic policy. The tariff ruling is a big deal for retailers and manufacturers, but the lack of clarity on what replaces the current regime means we’re not out of the woods. Investors will be watching closely to see if Trump pursues tariffs through alternative legal channels.

The GDP miss deserves more attention than it received today. Growth at 1.4% with core inflation still running at 3% is an uncomfortable combination that could complicate the Fed’s next moves. If the economy continues slowing while prices stay elevated, the central bank faces a genuine dilemma about whether to prioritize growth or inflation control.

Bath & Body Works (BBWI) launching on Amazon’s platform is another data point in the ongoing shift of traditional retail. CEO Daniel Heaf framed it as reaching customers beyond physical stores, but it’s also an acknowledgment that Amazon’s logistics network is now essential infrastructure. RingCentral (RNG) popped 34% on some positive development, while CrowdStrike (CRWD) and CoreWeave (CRWV) both sold off hard. Next week brings more economic data and the ongoing question of whether this GDP weakness is temporary or the start of something bigger.