⚡Reflation Trade Roars: Energy and Industrials Explode
🔎 Market Highlights February 21, 2026
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Cyclical sectors surged following the Supreme Court's tariff ruling, triggering a powerful risk-on rotation. Communication Services led with a 2.0% weekly gain, followed by Energy (+1.7%) and Industrials (+1.7%), as capital fled defensive positions.
Consumer Discretionary and Technology posted modest gains of +1.6% and +1.6% respectively, signaling hesitant participation from growth sectors. Materials added +0.7% while Financials barely moved (+0.5%), reflecting lingering concerns about credit quality despite improving sentiment.
The defensive collapse was severe. Healthcare dropped 0.9%, Utilities fell 0.9%, and Consumer Staples sank 1.7% as investors abandoned safety trades. Rising oil prices (Brent crude approaching $72) and geopolitical tensions in Iran further fueled the rotation into commodity-linked equities. This marks the continuation of 2026’s Great Sector Rotation, where Energy (+21% YTD), Materials (+17%), and Industrials (+12%) vastly outperform the flat broader market.
🚨 Still Holding Last Year's Tech Darlings?
While mainstream investors chase fading momentum in legacy growth names, a sector rotation is silently creating 30%+ gains in overlooked industrial and infrastructure plays. These aren't speculative bets. They're backed by structural catalysts: domestic fiscal stimulus, AI power demand, and supply shortages that won't resolve for quarters.
The data is clear: the top performers of February aren’t in your standard growth portfolio. They’re in sectors dismissed as “boring” just months ago.
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