Stock Focus Report – Market Analysis for February 23, 2026

Monday delivered a bruising session across all major indices as policy uncertainty made a comeback. The Dow Jones took the hardest hit, plunging 855 points (1.72%) to 48,770, marking its worst day in a month. The S&P 500 shed 71 points (1.04%) while the Nasdaq fell 258 points (1.13%), with tech’s high valuations making it particularly vulnerable to risk-off sentiment.

The selling pressure intensified after President Trump launched verbal attacks on the Supreme Court following its decision to overturn his extensive tariff program. Investors who thought tariff chaos was behind them got a rude awakening. Bitcoin joined the selloff, dropping 4.15% to $64,629, while Treasury yields edged higher with the 10-year adding 3 basis points to 4.03%. The dollar strengthened to 97.72 as traders sought safety.

Big cap losers painted a picture of broad weakness. IBM (IBM) cratered $33.79, Visa (V) dropped $14.66, and MercadoLibre (MELI) plummeted $132.41. When payment processors and enterprise tech names are getting hammered this hard, it’s a clear sign that growth concerns are spreading beyond the usual suspects.

Trade policy took center stage as the primary market catalyst. Trump’s renewed focus on tariffs after the Supreme Court’s decision created immediate headwinds, reminding investors that policy volatility remains alive and well. This wasn’t theoretical anymore. Panama’s Supreme Court nullified port contracts held by CK Hutchison (CKHUY, CKHUF), paving the way for Maersk (AMKBY) to take over canal operations, showing how quickly international business relationships can shift in the current environment.

On a brighter note, corporate America continues betting heavily on artificial intelligence infrastructure. Amazon (AMZN) announced a massive $12 billion investment in Louisiana AI data centers, part of a jaw-dropping $200 billion AI spending spree expected this year. That’s not just big, it’s redefining capital allocation across the tech sector. Meanwhile, AbbVie (ABBV) committed $380 million to expand Illinois manufacturing facilities, showing industrial investment hasn’t disappeared entirely.

Weaker economic data added to the gloom. U.S. factory orders fell 0.7% in December to $617.5 billion, missing economist expectations and raising questions about manufacturing momentum. A major Northeast snowstorm caused over 5,300 flight cancellations, hammering airline stocks including American (AAL), Delta (DAL), and JetBlue (JBLU). Mother Nature picked a bad time to pile on.

The market mood shifted from cautious optimism to genuine concern as tariff uncertainty roared back to life. Investors thought they’d moved past trade drama, but Monday’s action proved that policy unpredictability remains a persistent overhang. The fact that the Dow suffered its worst day in a month on this news shows how fragile sentiment has become at these elevated valuations.

Yet beneath the surface, pockets of strength emerged. Vanda Pharmaceuticals (VNDA) surged $2.39, bucking the broader selloff. Eli Lilly (LLY) scored FDA approval for Zepbound’s multi-dose pen, maintaining the same self-pay price as single-dose vials, a smart competitive move in the red-hot weight-loss drug market. These wins mattered because they showed that company-specific catalysts can still overcome macro headwinds.

PayPal (PYPL) became the subject of takeover speculation according to Bloomberg, with potential buyers circling after the stock lost nearly half its value. When a $100+ billion fintech giant becomes acquisition bait, it signals either deep value or deep problems. Investors are still deciding which. Meanwhile, Bayer (BAYRY) sued Johnson & Johnson (JNJ) over its Nubeqa prostate cancer drug, adding legal drama to the pharmaceutical sector’s already complex landscape.

Monday’s selloff served as a reality check that policy risk hasn’t disappeared, just taken a brief vacation. The combination of tariff uncertainty, weaker factory data, and broad-based selling pressure suggests investors are reassessing their bullish positions. When the Dow drops 855 points, it’s not noise, it’s a message.

Yet the Amazon AI investment and continued pharmaceutical innovation demonstrate that corporate America isn’t paralyzed by Washington drama. Companies are still deploying massive capital toward long-term growth opportunities. The question is whether these fundamental strengths can overcome the macro headwinds building in the background.

Volvo’s recall of 40,000 electric EX30 SUVs (VLVCY, VLVLY, VLVOF) due to battery fire risk reminds us that even in growth sectors, execution matters. The EV transition isn’t a straight line. As we move deeper into the week, watch how markets digest this policy uncertainty. If tariff rhetoric escalates further, this selloff could have legs. If cooler heads prevail, dip buyers might emerge at these lower levels.