Tariff Chaos, Nvidia Earnings Disappointment, and a Major Middle East Escalation
Executive Summary:
NVIDIA’s week of tariff turbulence ended in geopolitical shock. The Supreme Court’s ruling striking down Trump’s IEEPA tariffs sent markets reeling before the administration pivoted to a 10% flat tariff under Section 122 of the Trade Act of 1974. NVIDIA’s blockbuster earnings failed to satisfy elevated expectations, deepening the tech sell-off, while European and Japanese equities held up well. The week closed with a defining macro event: a joint U.S.–Israeli strike on Iran killed Supreme Leader Khamenei, prompting retaliation and a partial closure of the Strait of Hormuz. The full market impact is still unfolding.
Market Snapshot
Weekly performance across major global indices (week ending 27 February 2026):
| Index | Friday’s Closing Price | Weekly Change | Direction |
| DJIA | 48,977.92 USD | −1.05% | ▼ |
| S&P 500 | 6,878.88 USD | −0.43% | ▼ |
| NASDAQ Composite | 22,668.21 USD | −0.92% | ▼ |
| FTSE 100 (UK) | 10,910.55 GBP | +2.06% | ▲ |
| CAC 40 (France) | 8,580.75 EUR | +0.77% | ▲ |
| STOXX Europe 600 | 633.85 EUR | +0.52% | ▲ |
| Nikkei 225 (Japan) | 58,850.27 JPY | +3.56% | ▲ |
| CSI 300 (China) | 4,726.87 CNY | +1.08% | ▲ |
| Hang Seng (Hong Kong) | 26,630.54 HKD | +0.82% | ▲ |
| Brent Crude | 72.87 / bbl | +2.53% | ▲ |
| Gold | 5193 / oz | ~22% YTD | ▲ |
Foreign Exchange:
For the week ending 27 February 2026
| Pair | Friday’s Close | Week’s Change |
| EUR/USD | 1.1781 | +0.0031 (+0.26%) |
| USD/JPY | 154.60 | +1.30 (+0.85%) |
| GBP/USD | 1.2640 | +0.0058 (+0.46%) |
| USD/CHF | 0.8980 | −0.0042 (−0.46%) |
| AUD/USD | 0.6340 | −0.0020 (−0.31%) |
U.S. Markets Overview
Equities & Tariff Turmoil
The week opened with immediate volatility following the Supreme Court’s 6-3 ruling, which found that Trump had exceeded his authority in imposing tariffs under IEEPA. Within hours, the administration invoked Section 122 of the Trade Act of 1974, imposing a new 10% flat tariff on virtually all imports.
Markets sold off sharply on Monday before partially recovering as the week progressed.
The S&P 500 finished February down 0.9%, while the Nasdaq posted its worst monthly performance since March 2025, declining over 3%. A key divergence persists: the S&P 500 Equal Weight Index reached a new all-time high as the rotation out of mega-cap tech continues to lift cyclicals, value, small-caps, and energy. Among the Magnificent Seven, only Nvidia is in positive territory year-to-date; Microsoft, Amazon, and Tesla have all suffered double-digit declines.
NVIDIA & the AI Trade
NVIDIA’s Q4 FY2026 earnings were exceptional: revenue reached $68.1 billion (+73% YoY), data centre revenue surged 75% to $62.3 billion, and Q1 FY2027 guidance was set at $78 billion — well ahead of expectations. And yet, the stock fell over 5% the following day, erasing ~$260 billion in market cap. Investors had already priced in a strong beat, leaving little room for surprise. The iShares Expanded Tech-Software Sector ETF (IGV) is down nearly 23% year-to-date, reflecting broader anxiety over AI’s disruption to software business models.
A bright spot came from the AMD-Meta partnership: a multi-year deal valued between $60–100 billion will see Meta deploy AMD GPU capacity across its AI data centres, with AMD shares surging over 8% on the news.
Macroeconomic Data
January PPI data surprised sharply to the upside: headline monthly PPI rose 0.5%, and core PPI surged 0.8%, well above expectations. Annual core PPI reached 3.6%, its highest since March 2025, prompting a late-week sell-off and pushing the VIX back above 20. The 10-year Treasury yield nonetheless fell below 4.0% on safe-haven demand. Consumer Confidence edged up 2.2 points to 91.2, while the Atlanta Fed GDPNow model held its Q1 GDP forecast at 3.1%. Markets now price only a ~57% chance of a Fed rate cut by June.
European Markets
European equities delivered a resilient performance, with the STOXX Europe 600 gaining 0.52% and the UK’s FTSE 100 adding 2.06% to a fresh record high. The EURO STOXX 50 rose ~0.8%, posting a February gain near 4% and on track for an eighth consecutive monthly rise. France’s CAC 40 advanced 0.77%, and Italy’s FTSE MIB climbed 1.59%.
Earnings were the week’s key driver. Rolls-Royce guided for profits exceeding £4 billion in 2026; LSEG unveiled a £3 billion buyback after a 56% jump in pre-tax profits, with shares surging 9%; Allianz recorded its largest-ever annual operating profit at €17.4 billion; and Swiss Re reported a near-50% surge in net profit. The Ifo Business Climate Index rose to 88.6, its highest since last summer. Flash inflation data from France and Spain came in above expectations, though Germany’s CPI eased to 1.9% YoY. The ECB is expected to hold rates at 2.0% at upcoming meetings.
Japan
Japanese equities posted the strongest gains of any major market, with the Nikkei 225 rising 3.56% and the TOPIX gaining 3.42%, both reaching record highs. Markets remained optimistic about the policy outlook under PM Takaichi, and the new U.S. 10% tariff was seen as having a limited incremental impact on Japan. Governor Ueda reiterated a data-dependent BoJ approach, with rate hike decisions dependent on incoming inflation data. Tokyo-area core CPI rose 1.8% YoY in February. PM Takaichi’s nomination of two dovish economists to the BoJ Policy Board put modest upward pressure on the yen. Sentiment remains underpinned by structural corporate governance improvements and rising returns on equity.
China
Chinese equities staged a modest recovery post-Lunar New Year, with the CSI 300 rising 1.08%, the Shanghai Composite gaining 1.98%, and the Hang Seng adding 0.82%. Sentiment was supported by the upcoming ‘Two Sessions’ legislative gathering, where leadership will set key economic targets. Lunar New Year spending data were mixed, with tourism spending rising to 803.5 billion yuan — reflecting a longer holiday period rather than a clear acceleration in consumer demand. The PBoC is broadly expected to ease monetary policy later in the year.
Commodities & The Middle East Conflict
The week’s defining event unfolded on Saturday, 28 February: the U.S. and Israel launched a coordinated military strike on Iran, targeting leadership and nuclear infrastructure. Supreme Leader Khamenei was confirmed dead early Sunday. Iran responded with retaliatory strikes on U.S. military assets and Gulf state infrastructure, and partially restricted navigation through the Strait of Hormuz — the world’s critical oil chokepoint through which approximately 20 million barrels per day flow, representing nearly 20% of global liquid oil consumption.
Brent crude had already traded near $73 per barrel heading into the weekend, up ~20% year-to-date. With 24/7 crypto derivatives implying oil futures up nearly 5% and gold rising over 1%, Monday’s market open will hinge on how hostilities develop. Barclays analysts have warned that a prolonged Strait disruption could push Brent toward $100. Gold, already up ~22% year-to-date, is expected to extend its safe-haven rally.
Crypto Markets
Bitcoin endured its worst monthly decline since 2022, shedding more than 25% over February to trade around $63,000. The sell-off reflects Bitcoin’s persistent role as a leveraged proxy on risk assets rather than a store of value. Ethereum and Solana declined materially over the month. Bitcoin briefly fell further in the hours after the Iran strikes before partially recovering Saturday evening.
Regional Summary
| United States | Tech sell-off, tariff pivot post-SCOTUS ruling, hot PPI data; Nasdaq worst month since March 2025. |
| Europe | Resilient; STOXX 600 +0.52%, FTSE 100 at record highs. Strong earnings season driving outperformance. |
| Japan | Nikkei +3.56% to record highs; optimism around BoJ path and corporate governance reform. |
| China | Modest recovery post-Lunar New Year; CSI 300 +1.08%. Policy easing is expected later in the year. |
| Commodities | Oil ($73/barrel, +20% YTD) is poised for a spike; Strait of Hormuz disruption risk is severe. Gold at records. |
| Crypto | Bitcoin ~$63,000; worst month since 2022. Continues to track risk assets, not safe havens. |
| Key Risk | U.S.-Iran conflict: potential oil shock, Gulf market contagion, and broader geopolitical escalation. |
Week Ahead
Monday opens with the U.S.–Iran conflict dominating the agenda. The scale of any oil price move will depend on whether the Strait of Hormuz reopens and whether further escalation occurs. Beyond geopolitics, key watchpoints include: Fed speakers’ reaction to sticky PPI data; Congressional and trading partner responses to the new Section 122 tariffs; the AI trade following Nvidia’s mixed earnings reception; and China’s Two Sessions meeting for stimulus and growth signals.
Disclaimer
This report has been prepared for information purposes only. It is not intended to be, and should not be relied on as, financial product advice, investment advice, legal advice, taxation advice or a recommendation. It does not take into account the objectives, financial situation or needs of any person. Before acting on any information in this report, consider its appropriateness and seek independent professional advice where necessary.
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