February was defined by tensions, tariffs, trade talk and shifting rate paths. See how these events filtered through markets.
March 5, 2026
At the end of February, the U.S. and Israel attacked Iran as tensions escalated between the two sides. Iran responded by sending missiles to points in Israel and U.S. bases in the Middle East. Amidst the strikes on Iran, the country’s Supreme Leader, Ali Khanenei, was killed. Fears of escalating tensions could weigh on global financial markets, and the effective closure of the Strait of Hormuz could disrupt the flow of crude oil globally.
Global equity markets inched higher over the month of February. Strong corporate earnings offset concerns about artificial intelligence spending and reemerging trade uncertainty. Still, returns were muted and saw bouts of volatility over the month. It was reported that Canada’s economy contracted in the fourth quarter of 2025 and shed jobs in January. However, inflationary pressures did subside at the start of 2026.
The S&P/TSX Composite Index delivered a strong return over the month, reaching new record highs. U.S. equities posted a small decline. Yields on 10-year government bonds in Canada and the U.S. declined. Oil prices finished higher over the month, as did the price of gold.
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