Tariff Confusion Sinks Stocks: Market Analysis for Februrary 23rd, 2026

STA Research
February 23rd, 2026
Tariff Confusion Sinks Stocks: Market Analysis for Februrary 23rd, 2026
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Global Markets

Canadian Markets

Canada’s S&P/TSX Composite Index declined as renewed U.S. tariff uncertainty pressured cyclical sectors and dampened overall risk appetite. Gains in gold and silver prices provided a partial offset, with strength in mining equities reflecting a defensive rotation into precious metals amid macro volatility.

CIBC economist Benjamin Tal, warned that emerging weakness in Canada’s housing starts, could weigh on broader economic growth. The bank noted that housing activity has slowed to levels insufficient to drive construction-led expansion, with developers hesitant to launch new projects amid higher borrowing costs and softer demand. Benjamin Tal described the current environment as the early stage of a broader correction, highlighting that slower residential investment and cautious consumer spending could dampen GDP momentum in the quarters ahead.

American Markets

American markets dropped as policy risk re-intensified, with the Dow Jones Industrial Average falling over 800 points, as President Donald Trump imposed a new 15% tariff.  This comes despite a prior Supreme Court ruling that had overturned broader measures, creating renewed ambiguity around trade enforcement and global supply chains. Investors reacted by trimming exposure to sectors most vulnerable to cross-border cost pressures, including industrials, autos, and select technology hardware names.

Investors are also bracing for fresh macro data, as the U.S. Census Bureau is set to release December factory orders, with consensus expectations pointing to a 0.6% contraction, an outcome that would reinforce signs of cooling manufacturing activity.

Artificial intelligence disruption also remains another overhang on financial markets. Persistent concerns about competitive displacement across industries have added volatility, particularly among software and semiconductor names, contributing to broader market weakness.

European Markets

European equities moved lower in volatile trading after President Trump’s new 15% blanket tariff reignited global trade uncertainty, pressuring export-oriented sectors. The STOXX Europe 600 moved lower as investors reassessed earnings risks tied to supply-chain disruption and potential retaliation, while Germany’s DAX underperformed due to its heavy exposure to autos and industrial exporters.

The tariff backdrop raises margin and demand concerns for Europe’s manufacturing base, where integrated global supply chains make companies particularly sensitive to trade barriers. However, some pessimism was tempered by improved German business sentiment data from the Ifo Institute, signaling growing domestic optimism within the sector.

UK stocks traded flat, as investors weighed the potential spillover effects of the new U.S. tariff program. While the index’s heavy exposure to globally diversified multinationals and commodity-linked names provided some insulation, analysts warned that a sustained escalation in trade barriers could weigh on export volumes and corporate margins.  From a sectoral perspective, defensive names, such as consumer staples and healthcare demonstrated relative resilience, while more trade-exposed industrial and consumer discretionary stocks exhibited intraday volatility.

Corporate Stock News

Arcellx Inc. (ARCL:US) & Gilead Sciences Inc. (GILD:US) announced that Gilead will acquire Arcellx for an implied equity value of $7.8 billion, paying $115 per share in cash plus a $5 contingent value right, representing an 87% premium to Arcellx’s last close.

Athabasca Oil Corp. (ATH:CA) had its target price raised to C$9 from C$7 by RBC, citing strong operations, improving production growth, and a solid free-cash-flow profile supporting higher valuation multiples.

Cenovus Energy Inc. (CVE:CA) had its target price raised to C$34 from C$29 by ATB Capital Markets, driven by stronger-than-expected oil sands production and lower project-risk assumptions.

Copart Inc. (CPRT:US) had its target price reduced to $34 from $45 by JPMorgan, reflecting softer gross margins, increasing competitive pricing pressure, and lower forward estimates.

Deere & Co. (DE:US) was downgraded to Underperform from Hold by Jefferies, which also raised its price target to $550 from $475, citing stretched valuation despite weak farm income trends.

Domino’s Pizza Inc. (DPZ:US) beat fourth-quarter U.S. same-store sales expectations with 3.7% growth, though international same-store sales growth of 0.7% missed estimates amid competitive pressures.

DraftKings Inc. (DKNG:US) had its target price cut to $26.40 from $40.50 by Berenberg due to weaker FY26 revenue guidance and concerns about sportsbook market disruption.

Eli Lilly and Co. (LLY:US) & Novo Nordisk A/S (NVO:US) saw Novo Nordisk report that its obesity drug CagriSema failed to match the efficacy of Eli Lilly’s tirzepatide in a head-to-head trial, representing a competitive setback.

Ethos Technologies Inc. (ETHO:US) was initiated with an Overweight rating and a $13 target price by JPMorgan, citing attractive valuation and strong agency-driven growth prospects.

Fortune Brands Innovations Inc. (FBIN:US) faces activist pressure as investor Ed Garden built a stake and seeks leadership changes, including replacing the incoming CEO and nominating new board members.

General Dynamics Corp. (GD:US) received Transport Canada certification for its Gulfstream G500 and G600 jets, though certification for the G700 and G800 remains pending.

Honeywell International Inc. (HON:US) agreed to a 26% reduction in the purchase price for Johnson Matthey’s catalyst technologies unit due to weaker profitability and deferred projects.

Imperial Oil Ltd. (IMO:CA) was downgraded to Underperform from Sector Perform by RBC, citing stretched valuation relative to fundamentals and peers.

Jamieson Wellness Inc. (JWEL:CA) had its target price raised to C$45 from C$40.50 by National Bank, reflecting the inclusion of a sizable US$3.5 billion GLP-1 companion-product opportunity in its 2027 forecast.

Merck & Co. Inc. (MRK:US) is restructuring its human-health business into two divisions to address upcoming patent loss pressures tied to Keytruda.

Moderna Inc. (MRNA:US) had its target price raised to $69 from $63 by Piper Sandler, supported by anticipated growth from its next-generation COVID vaccine and pipeline approvals.

Vanda Pharmaceuticals Inc. (VNDA:US) received FDA approval for Bysanti, an atypical antipsychotic for schizophrenia and acute bipolar I disorder, with U.S. launch expected in the third quarter.

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