The Global Equity Market Pulse: A Comprehensive Review of the Week Ending February 13, 2026

The second week of February 2026 proved to be a watershed moment for global financial markets, characterised by a fundamental reassessment of the artificial intelligence (AI) narrative and a significant realignment of international trade relations. While the previous year was defined by a monolithic surge in technology valuations, this week signalled the arrival of what analysts are calling the “second wave” of the AI era—a period where investors have moved beyond simply buying the hardware providers to actively scrutinising the potential “disruption risk” facing established business models. From the trading floors of New York to the bustling exchanges of Mumbai and Sydney, the sentiment shifted from unbridled optimism to a “sell first, then assess later” mentality as the market sought to identify which industries might be undermined by increasing automation and algorithmic efficiency.¹

Throughout the week, the primary tension remained the balance between cooling inflation data and robust labour market reports. In the United States, a tame Consumer Price Index (CPI) print provided a late-week cushion, but it was not enough to erase the deep scars left by a multi-day technology rout. Europe navigated a sea of mixed corporate earnings, with defence and aerospace emerging as resilient pillars against a backdrop of banking sector weakness. Asia felt the full weight of the Wall Street slide, as regional tech giants faced intense selling pressure. India, however, was the site of perhaps the most historic development of the week: the announcement of an interim trade agreement with the United States that promises to reshape the economic ties between the two nations for the next decade.

The United States: AI Disruption Fears and Inflationary Reprieve

The American equity markets experienced a week of heightened volatility, marked by a sharp rotation out of high-growth technology names and into defensive havens. For the three consecutive sessions leading up to Thursday, February 12, major indices faced relentless downward pressure as the narrative surrounding artificial intelligence underwent a dramatic shift. Investors began to focus on the “downside” of the AI boom, specifically how emerging tools might cannibalise the profit margins of software-as-a-service (SaaS) providers, financial consultants, and logistics firms.¹

Benchmark Performance and the Thursday Rout

The most significant damage occurred on Thursday, February 12, when a massive selloff in tech and financial stocks sent all three major averages deep into negative territory. The Dow Jones Industrial Average plummeted 669.42 points, or 1.3%, to finish at 49,451.98. The S&P 500 followed suit, slipping 1.6% to end the session at 6,832.76, while the tech-heavy Nasdaq Composite bore the brunt of the onslaught, tumbling 2% to close at 22,597.15.¹

The “fear gauge,” known formally as the CBOE Volatility Index (VIX), surged 17.96% during the Thursday session, crossing the 20-point mark and indicating a significant increase in market anxiety.¹ Market breadth was notably poor, with decliners outnumbering advancers on the New York Stock Exchange by a ratio of 2.17-to-1, while on the Nasdaq, the ratio was an even more stark 2.74-to-1.¹

The catalyst for this tech-led rout was twofold. First, Cisco Systems issued a disappointing guidance forecast for the upcoming year, causing its shares to plunge 12.3%.¹ Analysts pointed to thinning margins and the high cost of the computer memory required for AI infrastructure as signs that the initial “gold rush” for hardware was entering a more expensive and less certain phase. Second, software firm AppLovin saw nearly 20% of its market value evaporate as concerns grew that AI could fundamentally alter how people interact with the internet, potentially bypassing the very services AppLovin provides.⁴

The Friday Recovery and CPI Data

On Friday, February 13, the markets found a degree of stability following the release of the January Consumer Price Index (CPI) report. The headline inflation rate rose just 0.2%, coming in slightly below the 0.3% estimate, while the annual rate cooled to 2.4%—its lowest level since May.² Core inflation, which excludes the more volatile categories of food and energy, rose 0.3%, meeting consensus expectations and bringing the year-over-year core rate to 2.5%.²

This “tame” inflation print was well-received by investors who had been worried that the Federal Reserve might remain more aggressive for longer. The news provided a “respite” for software companies that had been battered earlier in the week, with names like Salesforce and Oracle advancing between 2% and 4% on Friday.⁸

Despite the Friday gains, the major averages still finished the week in the red. The Nasdaq Composite ended the week down 2.1%, marking its third consecutive weekly loss, as investors continued to grapple with the sustainability of capital expenditure in the AI sector.⁶

Sectoral Analysis and Defensive Rotation

The week saw a distinct “flight to safety,” where investors rotated out of high-growth technology and into more stable, dividend-paying sectors. On the day the S&P 500 lost 1.6%, the Utilities Select Sector SPDR (XLU) actually gained 1.5%, and the Consumer Staples Select Sector SPDR (XLP) added 0.9%.¹ Defensive names like Coca-Cola and Merck ended the week on a high note, reflecting the market’s desire for earnings certainty in an era of technological disruption.¹

Conversely, the financial sector felt the heat as worries mounted that AI-driven automation could hamper wealth management and brokerage businesses. Morgan Stanley, for instance, saw its shares decline 4.9% during the Thursday selloff.¹ The real estate and logistics sectors also suffered, with CBRE Group plummeting 8.8% and C.H. Robinson Worldwide tumbling 14.5% on fears that AI-led efficiencies could reduce the demand for traditional commercial real estate and freight management services.¹

Europe: A Fragmented Landscape of Earnings and Macro Stability

The European markets navigated the week with a more mixed and resilient performance than their American counterparts. While the global tech selloff certainly cast a shadow over European bourses, the region’s diverse sectoral composition—heavy on defence, aerospace, and luxury goods—allowed some indices to finish the week in positive territory.⁷

Performance of Major Indices

The pan-European Stoxx 600 index closed the week with a tiny gain of 0.09%, despite a 0.13% dip on Friday.⁹ The performance was highly uneven across the continent, with London and Frankfurt managing modest weekly gains while Milan and Madrid suffered under the weight of a weakening banking sector.⁷

London’s FTSE 100 was bolstered by strong performance in the defence and professional services sectors. Relx was a standout performer, soaring 10%, while defence giant BAE Systems gained nearly 4% as geopolitical tensions continued to drive military spending.⁹ In Frankfurt, the DAX benefited from gains in the aerospace sector, with MTU Aero Engines and Rheinmetall rising sharply. Rheinmetall’s shares were particularly buoyed by news of a €200 million NATO contract and the successful divestment of its automotive business.⁹

The Banking Sector Slump

The primary drag on European markets was the banking sector, which recorded its biggest weekly decline in over ten months, falling 5.4%.¹⁰ This was particularly evident in Italy and Spain, where the major indices have a heavy financial weighting. In Milan, the FTSE MIB dropped 1.71% on Friday, led by sharp losses in Commerzbank, Deutsche Bank, and other regional lenders.⁹

The weakness in banks was driven by a combination of the global “AI disruption” narrative and a reaction to U.S. economic data. If the Federal Reserve were to pivot toward more aggressive rate cuts due to cooling inflation, European banks might see their net interest margins—the difference between what they charge on loans and pay on deposits—begin to shrink sooner than anticipated.³

Economic Growth and Trade Data

On the macroeconomic front, Eurostat confirmed that the European economy remains on a path of slow but steady recovery. Seasonally adjusted GDP for the fourth quarter of 2025 rose by 0.3% in both the Eurozone and the EU.⁷ While this growth is far from explosive, it suggest the region is successfully avoiding a recession. However, the trade surplus for the Euro area narrowed to 12.6 billion euros in December, down from 13.9 billion euros a year ago, reflecting the challenges faced by European exporters in a volatile global trade environment.⁷

Asia: Tracking the Global Tech Pivot

Asian markets were largely on the defensive throughout the week, as the region’s high concentration of technology hardware and software firms made it susceptible to the “AI disruption” fears originating in the United States. Investors in Tokyo, Hong Kong, and Seoul spent the week parsing through corporate earnings and looking for clues in U.S. economic data.⁵

Japan: High Volatility in Tech Heavyweights

In Tokyo, the Nikkei 225 fell 1.2% on Friday to close at 56,941.97.⁵ The Japanese market was particularly shaken by the performance of SoftBank Group, which has become a proxy for global AI sentiment. SoftBank’s shares tumbled 8.9% on Friday, even though the company had reported a $1.6 billion quarterly profit just a day earlier.⁵ This disconnect between positive earnings and a falling stock price perfectly illustrated the market’s newfound scepticism toward long-term AI valuations.

Another notable mover in Japan was Nikon, which plunged over 16% on Friday.¹¹ Overall, the TOPIX, a broader measure of the Japanese market, declined 1.63%, reflecting a widespread retreat from risk-sensitive sectors.¹²

Greater China and South Korea

The Hong Kong and mainland Chinese markets also faced headwinds. The Hang Seng index fell 1.7% to 26,575.84, while the Shanghai Composite index dropped 1% to 4,091.65.⁵ Despite the Friday dip, some technical indicators suggest that the Shanghai market remains in a rising trend channel in the medium-to-long term, with resistance levels recently broken at 4,030 points.¹⁴

South Korea’s Kospi offered a slight glimmer of resilience, ending Friday down only 0.3%. Samsung Electronics, the nation’s largest company, actually managed to gain 1.5% during the session.⁵ This suggests that while software-related AI firms are under pressure, the hardware giants that produce the actual memory chips required for these systems still enjoy some degree of investor confidence.

India: A “Friday the 13th” Selloff and a Landmark Trade Accord

The Indian stock market had a dual-faceted week. On one hand, the domestic indices experienced a severe “crash” on Friday, February 13, driven by global tech fears and heavy selling by foreign institutional investors. On the other hand, the week was marked by the announcement of a transformative trade framework with the United States that could redefine the nation’s economic trajectory.¹⁵

The Market Crash of February 13

The Friday session on Dalal Street was nothing short of brutal. The S&P BSE Sensex tumbled 1,048.16 points, or 1.25%, to close at 82,626.76. The broader Nifty 50 index suffered a similar fate, tanking 336.10 points, or 1.30%, to end at 25,471.10.¹⁵ Investors’ wealth was eroded by approximately ₹7.02 lakh crore in a single day as broad-based selling hit metals, IT, and commodity stocks.¹⁸

The Indian IT sector, which forms the backbone of the country’s service-led economy, was at the heart of the selloff. Worries that rapid advances in AI could reduce the global demand for traditional outsourcing work sent shockwaves through the industry.¹⁹ Within the Nifty 50, 45 out of 50 stocks closed in the red, with metal giant Hindalco Industries leading the losers with a nearly 6% plunge after reporting a 45% drop in net profit.¹⁹

Despite the carnage, India’s domestic economic fundamentals remained strong. January retail inflation came in at a low 2.75% under the new CPI series, and passenger vehicle sales rose 13% year-on-year.¹⁹ However, the weight of foreign institutional investors (FIIs) offloading ₹7,395.41 crore in equities was too much for domestic institutional buying to offset.¹⁸

The Trump-India Interim Trade Deal

Amidst the market volatility, the announcement of a “historic” framework for an interim trade agreement between U.S. President Donald Trump and Indian Prime Minister Narendra Modi stood out as a major geopolitical shift. The framework addresses one of the most contentious issues in recent bilateral relations: India’s importation of Russian oil.²⁰

Following India’s commitment to stop importing Russian oil and expand defense cooperation with the U.S., President Trump signed an executive order reducing tariffs on Indian goods from 50% to 18%, effective February 7, 2026.²⁰ In exchange, India has agreed to “intend” to purchase over $500 billion worth of U.S. energy, technology, aircraft, and agricultural products over the next five years.¹⁷

Key Terms of the U.S.-India Framework:

• Tariff Relief: U.S. reduces reciprocal tariffs on Indian textiles, leather, footwear, and certain machinery from 25% to 18%.²⁰
• Market Access: India will reduce or eliminate tariffs on all U.S. industrial goods and a wide range of agricultural products including tree nuts, soybean oil, and fruits.²²
• Energy and Defence: India commits to massive purchases of U.S. energy products and coking coal, and both nations agree to remove barriers to digital trade.¹⁷
• Sector Protections: India successfully negotiated to keep “pulses” (beans and lentils) protected as a sensitive sector, exempting them from tariff reductions.²⁴

This deal is seen by analysts as a strategic pivot that aligns India more closely with the American economic sphere while providing a long-term boost to the $30 billion Indian poultry industry through increased access to U.S. feed products.²³

Oceania: Banking Heights and Healthcare Lows

The Oceania region provided a striking example of market divergence this week. While the Australian stock market logged its best weekly gain in ten months, the New Zealand market sank to a four-month low.²⁵ The split was driven entirely by the different industry concentrations of the two nations’ benchmarks.

Australia: A Banner Week for the Big Banks

The S&P/ASX 200 index in Australia gained 2.4% for the week, its best performance since April 2025.²⁵ The rally was fueled by a stellar corporate earnings season, particularly among the nation’s “Big Four” banks. The financial sub-index climbed 5.4% over the week, marking its best performance since March 2022.²⁵

While the banks led the charge, the mining sector also showed strength, gaining 5.1% over the week despite a 2.2% drop on Friday.²⁵ However, the local tech sector followed the global trend, plunging to a two-year low, led by software firm WiseTech Global, which fell over 10%.²⁷

New Zealand: A Sharp Retreat

In New Zealand, the S&P/NZX 50 tumbled 2.5% on Friday alone to close at 13,198.18—its lowest point in over four months.²⁸ The New Zealand market was hit by a “double whammy” of tech disruption fears and a major slump in healthcare stocks. Healthcare giants like Fisher & Paykel Healthcare and Ebos Group were significant drags on the index, following disappointing results from their Australian counterparts Cochlear and CSL.²⁶

Adding to the “risk-off” sentiment in New Zealand was a rise in domestic inflation expectations. A Reserve Bank survey showed that business managers anticipate a faster pace of price increases in the coming year, which could prompt the central bank to keep interest rates higher for longer.²⁶

Commodities and Macro Trends: Gold’s Historic Run

The commodities market remained a key focus for investors seeking shelter from the volatility of the equity markets. Gold spent the week consolidating near historic highs, eventually pushing past the US$5,030 per ounce mark on Friday.³⁰ The metal has been supported by “erratic U.S. policy making” and high levels of geopolitical risk, making it the preferred haven for nervous capital.³²

Silver followed gold’s lead, rising nearly 3% on Friday to end at $77.33 per ounce.³¹ However, industrial metals like copper and iron ore faced more pressure. Copper fell slightly to $5.78 per pound, reflecting concerns that a slowdown in tech and manufacturing could reduce demand.³² Crude oil prices also slipped, with both Brent and WTI crude ending the week lower on concerns about global oversupply.¹¹

In the currency markets, the U.S. Dollar Index (DXY) remained relatively strong at 97.07, as the combination of high Treasury yields and safe-haven demand supported the greenback.¹⁵ The Australian dollar managed to reach its highest level since 2022, briefly touching $0.71 before paring gains.³²

Conclusion

The week ending February 13, 2026, was a period of intense transition for global markets. The narrative of “AI as a cure-all” has been replaced by a more nuanced and cautious assessment of “AI as a disruptor.” This shift has created a clear divide between the “old economy” sectors—like the record-breaking Australian banks or the robust European defence firms—and the “new economy” software and tech companies that are now facing existential questions about their future profitability.

While the cooling U.S. inflation data on Friday provided a much-needed stabiliser, the underlying technical damage to major indices and the surge in the VIX suggest that the road ahead may remain bumpy. However, the landmark trade framework between the U.S. and India serves as a reminder that long-term strategic shifts can still provide a foundation for growth, even in the midst of short-term market turmoil. Investors will now turn their attention to next week’s retail and manufacturing data, as well as the continued rollout of quarterly earnings, to see if the “rotation to realism” has further to run.

Disclaimer

This article is for informational purposes only and does not constitute financial, investment, or legal advice. The stock market is inherently volatile and involves risk. Past performance of any index, sector, or security is not a guarantee of future results. Please consult with a certified financial advisor or professional before making any investment decisions. The information provided is based on data available as of February 13, 2026.

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