United States
Wall Street closed out a bruising February on the back foot, with banks bearing the brunt of a broad risk-off move sparked by the collapse of a British mortgage lender and deepening anxiety over AI disruption.
The Dow Jones Industrial Average dropped 1.1 per cent, the S&P 500 fell 0.4 per cent and the Nasdaq Composite shed 0.9 per cent in the final session of the month. The benchmark index posted its worst monthly performance since March, a stark reversal from the record-setting pace earlier in the year.
Financial stocks were hammered after London-based Market Financial Solutions was forced into insolvency, with creditors flagging a potential £930 million shortfall in collateral backing their loans. The firm was accused of pledging the same assets against multiple loans, reigniting fears about hidden risks lurking in the private credit space. Goldman Sachs tumbled 7.5 per cent, Morgan Stanley lost 6.2 per cent, Citigroup dropped 5.2 per cent and Bank of America fell 4.7 per cent. The KBW Bank Index plunged 4.9 per cent.
The damage extended beyond banks. Private equity names have entered what analysts describe as a steep drawdown, with a basket of six major alternative asset managers now sitting an average of 43.1 per cent below their all-time highs. The selloff, which began in January, reflects mounting concern that AI tools are eroding the value of software companies that sit at the heart of many PE portfolios.
Technology stocks also struggled despite news that Amazon, SoftBank and Nvidia have agreed to tip $US110 billion into OpenAI, lifting the ChatGPT maker’s valuation above $US1 trillion. Nvidia fell 4.2 per cent, Apple lost 3.2 per cent and Microsoft slid 2.2 per cent. Atlassian resumed its difficult 2026, shedding 5.4 per cent.
Adding to the unease, the January producer price index came in hotter than expected, complicating the path to further rate cuts. The 10-year Treasury yield dipped six basis points to 3.95 per cent as safe-haven demand offset the inflation signal.
Netflix was the session’s standout, surging 13.8 per cent after walking away from its Warner Bros deal, with Paramount Skydance paying the $US2.8 billion breakup fee.
Europe
European equities bucked the global gloom, with the Stoxx 600 eking out a 0.1 per cent gain to close at a fresh record high. The index rose 3.7 per cent across February, extending its winning streak to eight consecutive months, the longest such run since 2013.
The region continues to benefit from a rotation trade as investors look beyond richly valued US tech stocks. Old-economy sectors including basic resources, energy, telecommunications and utilities have posted double-digit gains so far in 2026, comfortably outpacing the broader index. A record wave of corporate buyback announcements has added further fuel to the rally.
Food and beverage stocks and telecoms led Friday’s session, while travel names lagged. Swiss Re rallied after unveiling an unexpected share buyback, though EssilorLuxottica came under pressure on reports that Alibaba plans to launch its own AI-powered smart glasses this year.
European equity funds attracted $US3.2 billion in the week to Wednesday, marking a fourth straight week of inflows. Investors have poured $US18 billion into European funds so far in 2026, underscoring growing conviction in the region’s earnings recovery and relatively attractive valuations.
Australia
The local market heads into Monday’s session facing a wall of worry, with ASX 200 futures pointing 20 points lower, or 0.2 per cent, to 9150. That said, the benchmark closed February on a high note, adding 0.3 per cent on Friday to a record 9198.6. The 3.7 per cent monthly gain was the strongest since May and marked a third consecutive month of advances.
Rare earths dominated the headlines after MP Materials signed a major supply contract with an unnamed car manufacturer. Lynas Rare Earths surged 10.1 per cent and Iluka Resources jumped 9.1 per cent in a session that highlighted Australia’s strategic position in critical minerals supply chains.
Block was the best performer on the ASX 200, rocketing 27.8 per cent after announcing plans to halve its workforce while reporting a 17 per cent lift in gross profit to $US10.36 billion. At the other end, Bapcor collapsed 49.3 per cent after resuming trade following a heavily discounted capital raising at 60 cents a share.
Reporting season wrapped up with Coles tumbling 7.4 per cent on softer supermarket sales growth, while Harvey Norman dropped 9 per cent on weaker domestic performance. PEXA was a bright spot, climbing 4.7 per cent after delivering core profit nearly double consensus expectations.
Commodities and currencies
Escalating military action in the Middle East has sent energy markets into a heightened state of alert heading into the new week. Brent crude gained 2.5 per cent to $US72.48 a barrel on Friday, with reports suggesting tanker traffic through the Strait of Hormuz has nearly ground to a halt. Analysts warn that prolonged disruption could push prices well above $US80, given roughly one-fifth of global oil supply passes through the waterway.
Gold extended its remarkable run, climbing 1.5 per cent to $US5,264.83 an ounce as safe-haven demand intensified. Iron ore slipped 0.5 per cent to $US97.85 a tonne.
The Australian dollar edged up 0.1 per cent to 71.15 US cents on Friday, though the greenback surged in early Sunday trading as investors sought shelter from geopolitical risk. Bitcoin fell 2.9 per cent to $US65,616.
Economic Calendar
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This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
