February 2026 Market Commentary
Plan with Bob | Bob Chitrathorn

Here’s something worth sitting with: the market isn’t broken. It’s rotating. That distinction matters more than it might seem right now, especially for investors who’ve grown accustomed to a handful of giant tech stocks doing most of the heavy lifting.

February drove that point home in a real way. After years of the “Magnificent Seven” megacap AI names dominating returns, February brought what analysts at Morningstar described as a dramatic “panic rotation” away from those names and into nearly everything else. Energy is now the year’s best-performing sector, up nearly 20% year-to-date, while technology has slipped into negative territory. Industrials and materials have followed a similar path. Markets aren’t collapsing; they’re recalibrating, and that’s actually healthy.

The deeper shift, though, is global. US investors pulled $52 billion from domestic equity products in the first weeks of 2026, the fastest pace of outflows since at least 2010. Meanwhile, international equity funds have been pulling in an average of $65 billion per week, a record pace. For every $100 flowing into global equity funds right now, only $26 is landing in US stocks, down from 92% at the peak just a few years ago. Emerging markets, long overlooked, are finally getting their moment, partly because a weaker dollar stretches the value of foreign holdings for American investors. Cambridge Associates notes that non-US equities outpaced US stocks by nearly 14 percentage points in 2025 when measured in dollar terms, a spread that’s continuing into this year.

None of this surprises me. Concentration risk was always the quiet vulnerability in the bull market we just lived through. The ten largest companies in the S&P 500, mostly tech and growth names, represent roughly 40% of the index’s total market cap. When that group stumbles, the headline index looks worse than the underlying market actually is. The flip side is also true: the breadth we’re seeing now is genuinely encouraging.

What I’m watching closely is the economic backdrop, because the setup is more fragile than recent market performance might suggest. US GDP growth slowed sharply to a 1.4% annualized rate in the fourth quarter of 2025, the weakest pace in years, and early 2026 data from S&P Global’s PMI surveys points to that sluggishness carrying forward. Consumer spending is softening, hiring has cooled, and small businesses are squeezed between elevated
borrowing costs and rising input prices. Meanwhile, the Fed paused its rate-cutting cycle in January, holding rates steady while watching inflation remain above its target. That combination, slower growth, sticky prices, rates that aren’t falling fast, creates real pressure for anyone carrying heavy debt, including commercial real estate borrowers and leveraged companies.

Add to that the renewed trade turbulence. After a Supreme Court ruling struck down the prior tariff authority in late February, the administration moved quickly to impose a 10-15% universal global tariff under a different legal provision. The back-and-forth creates the kind of policy uncertainty that makes long-term planning difficult for businesses and investors alike. Geopolitical risk in the Middle East remains a live variable as well.

So where does that leave us? My positioning stays what I’d call defensively opportunistic. The rotation happening right now is real, and it opens genuine opportunities, in international diversification, in fixed income that finally offers decent yield, in the real-asset sectors benefiting from structural demand. At the same time, this isn’t the moment to chase what’s already run or to assume that recent calm means the coast is clear.

The biggest danger right now isn’t fear. It’s overconfidence built on a market that’s been more forgiving than conditions warrant. Staying diversified, keeping some ballast in the portfolio, and being ready to act when dislocations appear, that's the playbook heading into spring.

This commentary is for informational purposes only and does not constitute investment advice. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Please consult with a qualified financial professional before making any investment decisions.

Bob Chitrathorn CPFA®
President, Founder, Sr. Wealth Advisor
Wealth Planning by Bob Chitrathorn
(951) 465-6409 Office
bob@planwithbobinfo.com
Securities offered through Cetera Wealth Services, LLC (doing insurance business in CA as CFGAN Insurance Agency LLC), member FINRA/SIPC. Advisory Services offered through Cetera Investment Advisers LLC, a registered investment adviser. Cetera is under separate ownership from any other named entity. Alta Vista Credit Union, Alta Financial Services, and Cetera are independent of each other.) CA Insurance License #0E63308.Registered
address:1425 W Lugonia Ave, Redlands ,CA 92374. 909-809-3637
Investments are: Not FDIC/NCUSIF insured • May lose value • Not financial institution guaranteed• Not a deposit • Not insured by any federal government agency.

*The views stated in this letter are not necessarily the opinion of Cetera Wealth Services, LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Investors should consider their financial ability to continue to purchase through periods of low price levels. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing. Additional risks are associated with international investing, such as currency fluctuations, political and economic stability, and differences in accounting standards