Daily Brief - February 23, 2026 (Morning)

 ## Pre-Market Overview U.S. equity futures show a mixed but cautiously optimistic tone ahead of the open. The S&P 500 futures are up modestly, reflecting a continuation of the slight gains seen in the cash market yesterday. The Nasdaq futures also indicate a positive bias, buoyed by strength in select technology and AI-related names. Conversely, the Dow and Russell 2000 futures are relatively flat to slightly lower, suggesting some sector-specific caution. Overnight, Asian markets were mixed amid ongoing uncertainty around U.S. trade policy and tariff developments. Hong Kong and South Korea advanced, supported by chip sector optimism, while other regions showed hesitation. European markets are trading lower this morning, weighed down by renewed concerns over U.S. tariffs and their potential impact on global trade. The U.S. Supreme Court’s recent ruling to strike down some of former President Trump’s tariffs has injected volatility and uncertainty into trade-sensitive sectors. Market sentiment is cautious heading into today’s session. Investors are digesting the implications of the tariff ruling and awaiting key earnings reports, including from major tech companies. The Federal Reserve’s comments on the potential for a March rate cut remain a focal point, with Fed’s Waller emphasizing labor market data as the critical factor. Additionally, geopolitical tensions and a powerful winter storm impacting the U.S. Northeast add layers of risk to the trading environment. ## Top Stories Moving Markets - **Novo Nordisk Weight-Loss Drug Trial Disappoints** Novo Nordisk shares plunged 10% after a new obesity drug trial failed to match the efficacy of Eli Lilly’s competing product. This setback raises questions about Novo’s growth trajectory in the lucrative weight-loss market. The news pressures healthcare and biotech stocks broadly, as investors reassess pipeline risks. **$NVO** is the direct ticker impacted, with ripple effects on **$LLY** and other obesity drug developers. - **Eli Lilly Launches Multi-Dose Weight-Loss Drug Device** Eli Lilly is launching a new multi-dose delivery device for its obesity drug Zepbound in the U.S., allowing a month’s worth of doses in one pen. This innovation could enhance patient compliance and market share. The FDA’s recent approval of Allurion’s gastric balloon for obesity treatment also supports the sector’s momentum. **$LLY** is positioned for gains today, benefiting from product innovation and regulatory tailwinds. - **ASML Advances EUV Light Source Technology** ASML unveiled a breakthrough in extreme ultraviolet (EUV) lithography light sources that could increase chip output by 50% by 2030. This development is critical for semiconductor supply chains and AI chip production. The news boosts optimism for semiconductor capital equipment and chipmakers. **$ASML** (data not available) and related chip stocks like **$ADI** (+2.37%) and **$NVDA** (+1.55%) are likely to see positive sentiment. - **U.S. Supreme Court Strikes Down Some Trump Tariffs** The Supreme Court ruling to invalidate parts of Trump-era tariffs has created uncertainty in trade policy. While it removes some tariff burdens, it also complicates the outlook for importers and exporters. The dollar softened, and gold surged (+3.03%) as markets priced in renewed trade uncertainty. This ruling will influence sectors sensitive to tariffs, including industrials, consumer discretionary, and materials. - **Domino’s Pizza Raises Dividend and Reports Strong Sales** Domino’s Pizza reported Q4 results with a 3% same-store sales growth outlook for 2026 and announced a 15% dividend hike. The company also added 392 stores globally, signaling robust expansion. This positions **$DPZ** (+5.68%) as a strong consumer discretionary play amid cautious consumer spending. The dividend increase may attract income-focused investors. ## Stocks to Watch Today - **$NVO** - Shares down 10% after obesity drug trial results disappoint versus Eli Lilly’s product. Watch for sector reaction and potential biotech selloff. - **$LLY** - Gains on launch of multi-dose weight-loss drug device and FDA approval of Allurion gastric balloon. Positive momentum in obesity treatment space. - **$ASML** - Data not available, but breakthrough in EUV technology could drive semiconductor sector strength. - **$ADI** - Up 2.37% on chip cycle recovery and ASML technology news. Strong outlook for semiconductor equipment. - **$NVDA** - Up 1.55%, supported by AI demand and semiconductor supply chain optimism. - **$DPZ** - Up 5.68% after strong Q4 results, dividend hike, and positive sales outlook. - **$ETSY** - Surged 7.10% following BTIG reiteration of buy rating and positive sentiment after Depop sale. - **$GOOGL** - Up 4.74% on AI-related optimism and strong backlog of capital expenditures. - **$BX** - Down 4.58% amid broader private credit concerns and sector rotation. - **$SNOW** - Down 4.64% on margin concerns and Stifel price target cut. - **$SOFI** - Down 2.95% despite fintech sector interest; watch for volatility. - **$U** - Down 1.89% despite Hedgeye adding as a long with 50% upside target; potential volatility. ## Sector Setup - **Technology:** Mixed. Semiconductor equipment and AI-related names like **$ADI**, **$NVDA**, and **$GOOGL** show strength on innovation and demand. However, some software companies face margin pressure and downgrades (e.g., **$SNOW**, **$ADBE** down 1.7%). Overall, cautious optimism but selective stock picking recommended. - **Healthcare:** Volatile. Weight-loss drug competition impacts biotech and pharma stocks. **$LLY** benefits from innovation, while **$NVO** suffers from trial disappointment. Watch for sector rotation and drug pipeline news. - **Consumer Discretionary:** Positive. **$DPZ** and **$ETSY** rally on strong earnings and strategic moves. Consumer staples also show modest gains, supported by tariff ruling easing some cost pressures. - **Financials:** Mixed but stable. Banks like **$JPM** (+0.46%) and **$BLK** (+1.55%) show resilience. However, private credit concerns weigh on **$BX** (-4.58%). Watch for mortgage rate sale impact and Fed commentary. - **Energy:** Slightly negative. Oil prices are steady but softened amid U.S.-Iran talks and tariff uncertainty. Energy ETFs like **$XLE** and major producers like **$XOM** (-2.29%) reflect cautious sentiment. ## Economic Calendar & Fed No major economic releases are scheduled for today. Market focus remains on Fed commentary, particularly from Fed’s Waller, who emphasized that the March rate cut decision hinges on upcoming labor market data. Investors should monitor any Fed speeches or statements for clues on monetary policy direction. ## Crypto & Commodities - **Bitcoin** is down 1.98% to $66,269, continuing to face selling pressure despite institutional interest. Coinbase’s chief strategist remains bullish on institutional adoption, but recent whale selling and tariff jitters create volatility. - **Gold** surged 3.03% to $473.50, benefiting from renewed trade uncertainty after the Supreme Court tariff ruling and safe-haven demand. - **Oil** is steady, with USO up 0.14% at $81.30, as U.S.-Iran nuclear talks and tariff concerns keep supply/demand balance in focus. ## Trading Game Plan - Focus on **healthcare** and **biotech** stocks, especially those involved in obesity treatments. Monitor **$LLY** and **$NVO** for volatility and sector sentiment shifts. - Favor **semiconductor equipment** and **AI-related technology** stocks benefiting from ASML’s EUV breakthrough and strong AI demand (**$ADI**, **$NVDA**, **$GOOGL**). - Be cautious on **private credit** and **financials** exposed to credit risk (**$BX**), while banks with strong fundamentals remain stable. - Watch **consumer discretionary** for selective opportunities in companies with strong earnings and dividend growth like **$DPZ** and **$ETSY**. - Monitor geopolitical and trade developments closely, as tariff uncertainty and U.S. Supreme Court rulings continue to influence market sentiment and commodity prices. - Keep an eye on Fed communications and labor market data for clues on interest rate policy, which will impact financials and broader market risk appetite. This session is likely to be driven by earnings reactions, trade policy developments, and sector rotation amid mixed macro signals. Traders should remain nimble and focus on high-conviction themes in technology, healthcare, and consumer discretionary.