📈 The Week Ahead (February 20, 2026): Market Insights from HPK Provident Advisors
The S&P 500 is trading near where it began the week and remains essentially flat year to date. However, performance beneath the surface has been more constructive. International equities, value stocks, and small caps are showing relative strength. The market-cap-weighted index has faced headwinds, largely due to the recent technology selloff—particularly within software.
While I am not yet ready to add exposure to the space, I believe the current fears are largely overdone. It’s true that certain business models could be disrupted by artificial intelligence, and some companies may become obsolete. That said, I do not share that concern for the sector broadly—especially among the larger, well-capitalized companies that have demonstrated consistent leadership in recent years.
On the macro front, economic data skewed to the downside this week. Durable goods orders declined 1.4%, and preliminary Q4 GDP came in below expectations at 1.4% (annualized 2.2%). Growth was driven by consumer spending and private investment but was partially offset by weaker government spending and declining exports.
This morning, the Fed’s preferred inflation gauge—the December PCE deflator—came in hotter than expected. Headline PCE rose 0.4% for the month, double November’s pace, while core PCE also increased 0.4%, in line with expectations but again double the prior reading. On an annualized basis, headline and core inflation registered approximately 2.9% and 3.0%, respectively.
The latest Federal Reserve minutes leaned hawkish, with committee members suggesting that if inflation remains elevated and sticky, additional rate hikes may be warranted. While I agree that inflation could prove persistent, I find it difficult to believe the Fed is more concerned about inflation than a softening labor market. So why the shift in tone? In my view, policymakers may be increasingly sensitive to pressure from a weakening U.S. dollar.
Next week’s economic calendar is relatively light, but I will be watching consumer confidence, jobless claims, and the Producer Price Index closely. The week’s primary catalyst, however, may be the earnings release from the largest semiconductor company on Wednesday. Given its influence on sentiment, the report could serve as a meaningful catalyst for the broader technology sector.
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Disclaimer
The opinions expressed in this material are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and does not guarantee future results. All indices are unmanaged and cannot be invested in directly. Economic forecasts may not develop as predicted.