Solid US Data Sparks Turnaround Tuesday Relief Rally: Feb. 24, 2026

Solid economic data supported a Turnaround Tuesday in stocks as strengthening hiring statistics from ADP coincided with a beat on consumer confidence. Investor sentiment was hurt on Monday by confusion regarding the road ahead for tariffs, as the White House vowed to maintain restrictive trade measures. Thankfully, Wall Street has grown accustomed to the back-and-forth characteristics of the Trump Administration and top of mind today on Tuesdays was that the cycle’s foundation appears healthy. As a result, equities recovered broadly with consumer discretionary, technology and industrials leading amidst all four major benchmarks advancing on the session. However, the better-than-expected reports drove the greenback and yields modestly higher, with the bear-flattening move across the curve led by the monetary policy sensitive shorter tenors. Rates climbed because improving jobs figures weaken the argument from dovish voting members of the Fed that are pointing to softening labor trends to justify cuts. Also on Tuesday, commodities ex copper sank on a lack of safe-haven demand and a stronger dollar, and so, too, did volatility protection instrument premiums as traders unwound hedges and turned offensive. Elsewhere, the lift in animal spirits increased interest in forecast contracts but cryptocurrencies didn’t catch a break despite the risk-on mood.

Consumer Confidence Recovers

Improving sentiments concerning the future lifted consumer confidence this month, even as perspectives about the present weakened. The headline figure of 91.2 exceeded the projected 87 and January’s 89, however, it was well below the 2025 average of 95. The sub-indices for current conditions and longer-term expectations shifted in bifurcated fashion, from 121.8 and 67.2 to 120 and 72. Households remained worried about inflation, tariffs, immigration restrictiveness and politics, while concerns of labor market opportunities, income prospects and business possibilities lightened to an extent. Additionally, anticipated price pressures were unchanged, while survey respondents were bullish on stocks but believe that interest rates will stay elevated.

Past performance is not indicative of future results.

ADP Releases Strongest Print Since Late October

Private sector payrolls increased by an average of 12.75k workers in each of the four weeks during the period ended Feb. 7, according to ADP. It was the strongest print since Oct. 29 and marks a persistent hiring acceleration that began in early January. The positive trend is strengthening investor confidence regarding the buoyancy of the cycle.

Past performance is not indicative of future results.

Economic Growth Can Quell Volatility Sparked By AI, Tariffs

The stage is set for AI and tariffs to remain turbulent themes that can amplify bumpiness on Wall Street while robust economic data can suppress volatility. Indeed, the significant capital expenditures committed by corporate America are under careful watch of stock and fixed-income players on the public side, as well as participants that are increasingly exposed to the modern technology via private markets through both equity and credit. The fluctuations of the risk-reward calculations and the financial return profiles are poised to keep investors on a jarring ride, just as President Trump’s tariff policies generate confusion and unease for traders. But ongoing evidence signaling buoyant consumption, improving sentiment, faster hiring and strengthening activity can continue to offset risks, serving as a reason to scoop the ice cream.

International Roundup

UK Retailers Are Glum

The Confederation of British Industry (CBI) Distributive Trades Survey fell from -17 in January to -43 for this month, a much worse showing than the -27 anticipated by a consensus of economists. The Confederation reports that retail sales in the year to February sank at the fastest pace since mid-2023, although the contraction is expected to decelerate in the coming month. Meanwhile, employment slipped and selling prices climbed. Retailers also expect to curtail capital expenditures, and persistently weak demand is expected to weigh on sentiment.

China Holds Benchmark Rates

China’s central bank held its 1-year and 5-year key rates at 3% and 3.5% yesterday as the country focuses on measures other than monetary policy to juice domestic demand. The People’s Bank of China decision extends the current costs of capital for the 10thconsecutive month as the country struggles with sluggish consumer spending, excessive manufacturing capacity and a glut of residential real estate. Meanwhile, China’s currency has been strengthening, potentially creating a headwind for export volumes. Domestically, new home prices have declined year-over-year (y/y) every month since last August and wholesale prices have been softening as consumer spending has weakened. Additionally, in the fourth quarter, gross domestic product grew only 4.5% y/y in the final three months of last year, its slowest pace in approximately three years. After having mixed results with trade-in subsidies to boost purchases of large-ticket items, officials recently launched incentives for consumers to spend on services, such as travel and sporting events.

Canada Manufacturing Sales Tumble
Manufacturing sales in Canada sank 3.3% month over month (m/m) in January, the third decline in the past four months, according to preliminary data from Statistics Canada. The drop, a reversal from the 0.6% gain in December, was driven primarily by weakness in the transportation equipment and machinery subsectors.

And Railroad Freight Falls

Railroad freight volume fell 2% y/y in December with fewer shipments in iron ore and coal hurting overall demand. For the full year, railroad freight sank 0.2% despite strong levels of grain shipments during a bumper crop-production year, helping to offset a decline in demand from US rail connections.

South Korea Gate Prices Accelerate

South Korea’s preliminary Producer Price Index was up 0.6% m/m in January, a slightly stronger gain than the 0.4% jump in the final month of 2025. The y/y growth rate, however, was unchanged from December’s 1.9%.

For the m/m print, the agricultural, forestry and marine products category and the services classification had the largest sticker increases, gaining 0.7% each. Manufacturing products followed at 0.6% while electric power, gas, water and waste were flat. Among subcategories, financial and insurance was 4.7% more costly than in December and basic metal products were 3% higher.

While Consumer Confidence Hits Three-Month High

A strong domestic equity market and demand for semiconductor chips pushed South Korea’s Consumer Confidence gauge from 110.8 in January to 112.1, its highest level in three months, according to the Bank of Korea. A reading of 100 is the threshold between negative and positive. The biggest gain occurred in assessments of current economic conditions and expectations as consumers expressed optimism regarding export demand and the stock market. Conversely, efforts by the government to shore up the residential real estate market failed to prevent a decline in housing sentiment.