Macro at a glance
Following weeks of diplomatic tensions, the United States and Israel conducted military operations against Iran on February 28. The strikes targeted regime leadership, atomic facilities, and ballistic weapon sites. Iran responded the same day with missile fire directed at American partners in the region—Israel, Jordan, Saudi Arabia, Iraq, Qatar, Kuwait, the UAE, and Bahrain. The U.S. had spent months preparing, deploying two carrier strike groups, 200 aircraft (roughly 100 for transport/refueling), and over 50,000 personnel.
On February 20, the Supreme Court issued a 6-3 decision in Learning Resources, Inc v. Trump, determining that tariffs imposed under presidential authority exceeded constitutional bounds. This ruling nullified levies that had raised America's effective tariff rate to approximately 17%—the highest since the early 1930s. Markets responded with restrained positivity: equities gained while the dollar and bond prices fell. Yet the judgment cannot reverse protectionism's economic harm. Trump reimposed a 15% tariff using 1974 Trade Act authority, while potential refunds of $100–175 billion on prior duties pose fiscal stimulus complications amid already fragile conditions. December core inflation remained at 3% annually, complicating monetary decisions and representing the primary macroeconomic concern.
Japan's LDP achieved a historic sweep in the February 8 snap election, capturing 316 of 465 seats. Under PM Sanae Takaichi, the party secured single-party supermajority status, with the coalition reaching 352 seats. This delivers strong backing for Takaichi's expansionary fiscal approach, featuring ¥21 trillion in stimulus and a proposed two-year food consumption tax suspension. Financial markets responded forcefully: the Nikkei surged 8.5%. However, 10-year JGB yields climbed 6 basis points to 2.282%, reflecting apprehension about debt sustainability in an economy exceeding 250% debt-to-GDP.
One Sector, One Insight
Basic Materials and Energy
Engie announced February 25 that it would fully acquire UK Power Networks for £10.5 billion in equity value. This landmark deal marks the Cheung Kong Group's exit and gives Engie stewardship of roughly 192,000 kilometers of distribution lines serving 8.5 million British households. The strategic focus centers on gaining access to predictable, regulated electricity distribution revenue while capitalizing on grid expansion driven by energy transition demands. Engie will employ debt, hybrid securities, and a €4 billion asset-sale program through 2028 to fund the acquisition while maintaining investment-grade status. The transaction should conclude mid-2026, pending regulatory approval.
Consumption and General Public Services
Beverage industry preferences diverged sharply in late February 2026. Diageo's stock plummeted nearly 13% on February 25—its worst single trading day ever—after new CEO Dave Lewis halved the dividend and downgraded revenue guidance, noting pronounced American weakness and a 13% Asia-Pacific sales decline. Meanwhile, Heineken delivered robust full-year outcomes earlier that month, expanding operating profit 4.4% and commencing fresh buyback initiatives. This contrast reveals the "premiumization" strategy's vulnerability during economic tightening, as traditional, affordable beer maintains volume and margin resilience.
Financial Services
European investment banks reported their highest trading revenues in over a decade for full-year 2025, fueled by ongoing macroeconomic uncertainty and heightened client engagement. Deutsche Bank's Investment Bank revenues climbed 9% to €11.5 billion, with Fixed Income & Currencies achieving record €9.6 billion. UBS reported annual net profit surging 53% to $7.8 billion, supported by elevated trading activity following Credit Suisse absorption, while Barclays achieved 13% pre-tax profit growth to £9.1 billion. The surge reflects "normalized" rate environments and expanded hedging demand across FICC and equity derivatives. BNP Paribas contributed through 9.1% Global Markets revenue expansion.
Healthcare
February 2026 witnessed remarkable healthcare sector consolidation spanning biotechnology, hospital networks, and veterinary services. Gilead Sciences agreed to acquire Arcellx for $7.8 billion, emphasizing anito-cel, a promising CAR T-cell therapy for multiple myeloma. In animal health, Covetrus and MWI Animal Health announced a $3.5 billion merger combining international distribution with veterinary software. Blackstone and TPG moved to acquire diagnostics provider Hologic for up to $18.3 billion. These transactions reflect structural industry pressures: pharmaceutical companies filling pipeline gaps before patent expirations and private equity consolidating service infrastructure.
Industrials
On February 6, Stellantis declared an operational "reset" generating approximately €22.2 billion in charges, predominantly from impairments and write-offs. The organization attributed most charges to declining electric vehicle demand and production plan restructuring, including platform impairments and cancelled product write-offs, with approximately €6.5 billion in cash payments anticipated over four years. On February 26, Stellantis disclosed total 2025 impairments of €25.4 billion and a €20.1 billion net loss for the second half. Stellantis joins recent automotive announcements: Volkswagen took €6 billion in charges, Ford recorded $19.5 billion, and GM recognized $6 billion, all attributing difficulties to EV sales challenges.
Technology and Network Equipments
The technology sector experienced dramatic capital reallocation amid artificial intelligence concerns. The iShares Expanded Tech-Software ETF fell 27% from peak levels as investors feared AI-driven obsolescence. Tools like Anthropic's Claude Code and OpenAI's ChatGPT triggered worries that AI-generated custom applications could displace established platforms including Salesforce and ServiceNow, both declining over 33%. Conversely, Goldman Sachs identified "HALO" firms—defined by Heavy Assets and Low Obsolescence risk—outperforming capital-light software by 35% since 2025. This category encompasses industrial and semiconductor leaders like Airbus, ASML, and Boeing. The market increasingly values "real-economy" strategic value of physical infrastructure and engineering complexity. Consumer staples leaders like Coca-Cola and PepsiCo surged up to 20% as investors sought refuge in non-digital competitive advantages, signaling structural repricing favoring tangible assets over software.
The stock of the month
Lumentum, a primary supplier of optical and photonic components for artificial intelligence and cloud data center operations, demonstrated exceptional performance, trading around $677 after surging over 100% during the month. Momentum intensified following February 3 results: Q2 FY2026 revenue reached $665.5 million (up 65.5% annually) with substantially improved profitability.
Key performances
| Name | As of February 28 | Monthly change | YTD |
|---|---|---|---|
| S&P500 | 6878.88 | -1.43% | 0.49% |
| Dow Jones | 48977.92 | -0.05% | 1.90% |
| NASDAQ | 22668.21 | -4.82% | -2.47% |
| FTSE100 | 10910.55 | 6.88% | 9.86% |
| CAC40 | 8580.75 | 5.25% | 5.29% |
| DAX | 25284.26 | 1.57% | 3.24% |
| SMI20 | 14014.30 | 6.04% | 5.63% |
| MSCI WORLD | 4557.25 | 0.64% | 2.85% |
| VIX | 19.86 | 21.47% | 32.84% |
| CHF/USD | 1.2992 | 0.50% | 3.00% |
| CHF/EUR | 1.0994 | 0.77% | 2.38% |
| Brent $/bbl | 73.08 | 4.77% | 20.06% |
| Gold Spot $/oz | 5278.26 | 7.83% | 22.23% |
Upcoming events
- Mar 11: US CPI (February 2026)
- Mar 17–18: US FOMC meeting
- Mar 18–19: BoJ monetary policy meeting