**Global Markets Brief: February 20, 2026** The global financial landscape is navigating a complex transition as the "Year of Truth" for AI matures and central banks hold a steady hand on interest rates. While foundational growth remains resilient, a noticeable shift toward defensive sectors and high-quality credit is defining the current quarter. **Equity Markets: Tech Volatility and Sector Rotation** Wall Street indices have recently pulled back from record highs as the initial AI hype cycle evolves into a phase of rigorous valuation. The **S&P 500** is hovering around the **6,832** mark, reflecting a **1.6%** decline in the most recent session. Similarly, the **Dow Jones Industrial Average** shed **1.3%** to settle at **49,451**, while the **Nasdaq** tumbled **2%** to **22,597**. Investor sentiment has become increasingly sensitive to the revenue-generating capabilities of AI investments. Consequently, we are seeing a rotation away from communication services and tech, which saw drops of **1.8%** and **2.6%** respectively, toward defensive havens. The **Utilities** sector gained **1.5%**, while **Consumer Staples** rose by **0.9%**. **Interest Rates and Central Bank Policy** Monetary policy remains in a holding pattern. The **Federal Reserve** and other major central banks have largely maintained existing rates following a series of cuts throughout 2025. In India, the **RBI** kept the repo rate unchanged at **5.25%** in its February session, projecting a "Goldilocks" scenario of **7.4%** GDP growth alongside manageable inflation. Global 10-year bond yields are staying range-bound. Market analysts anticipate a brief rally mid-year with potential **50 basis point** cuts if labor data softens, though yields are expected to drift higher by the fourth quarter as AI-related infrastructure financing puts pressure on credit markets. **Commodities: Energy and Metals** Energy markets are currently "flashing red" due to heightening geopolitical friction. **Brent Crude** has crossed the **$71.41** per barrel mark, while **WTI** settled near **$66.11**, marking a sharp climb driven by risk premiums rather than supply fundamentals. Precious metals continue to show immense resilience. International gold prices have touched all-time highs, with spot gold holding near **$5,000** per ounce. In domestic markets, prices have been even more pronounced, with 24K gold reaching approximately **₹1,56,510** per **10 grams** in India, a gain of **0.29%** in the latest trading cycle. **Technology and the "Prototype Economy"** The tech sector is shifting from "writing code" to "expressing intent." AI is no longer an experiment; it has become the backbone of enterprise architecture. However, this has created a "prototype economy" where the speed of development brings new risks in governance and data sovereignty. Cloud 3.0 has emerged as the standard, focusing on hybrid and sovereign models to manage sensitive data for AI training. While AI disruption fears have hit sectors like private equity and logistics—where firms like **Blue Owl Capital** recently froze redemptions—the long-term outlook remains bullish for companies that successfully integrate intelligent operations. **Key Market Indicators (Latest)** * **S&P 500:** 6,832.76 (**-1.6%**) * **Nasdaq Composite:** 22,597.15 (**-2.0%**) * **Brent Crude:** $71.41/bbl * **Gold (Spot):** ~$5,000/oz * **RBI Repo Rate:** 5.25% (Unchanged) * **VIX Index:** 20.82 (**+17.96%**)