US stock markets closed lower on Friday, February 20, 2026, as investors reacted to a landmark Supreme Court ruling and fresh economic data showing a significant cooling of the domestic economy. The S&P 500 fell 26.63 points, or 0.4%, to finish at 6,117.52. The Dow Jones Industrial Average dropped 450.94 points, a 1% decline, ending at 44,176.65. The Nasdaq Composite slipped 0.5% to close at 19,962.36, while the Russell 2000 index of smaller companies retreated 0.9%. Market sentiment was heavily influenced by the U.S. Supreme Court's 6-3 decision to strike down the broad global tariffs imposed under emergency powers. This ruling upends a central pillar of current trade policy, impacting over $133 billion in duties collected since late 2024. While the decision removes a layer of trade uncertainty, it creates a "legal mess" regarding potential refunds for billions of dollars already paid by importers. Economic growth slowed more than anticipated in the fourth quarter of 2025. Real GDP increased at an annual rate of 1.4%, a sharp deceleration from the 4.4% growth recorded in the third quarter. This slowdown was partially attributed to the record-breaking 43-day government shutdown that occurred late last year, which stripped approximately 1 percentage point from the final growth figure. Inflation remains a persistent concern for the Federal Reserve. The Personal Consumption Expenditures (PCE) price index—the Fed's preferred inflation gauge—rose to 2.9% in the fourth quarter, up from 2.8% in the previous period. Core inflation, which excludes volatile food and energy costs, stood at 2.7%, highlighting that price pressures are not receding as quickly as many had hoped. The labor market showed signs of softening as well. Nonfarm payrolls for January added only 143,000 jobs, falling short of the 175,000 expected by analysts. Despite the slower hiring pace, the unemployment rate ticked down slightly to 4.0%, while labor force participation rose to 62.6%. Sector performance was mixed amid the volatility. Consumer staples and real estate saw modest gains as investors sought defensive positions. However, retail stocks faced heavy pressure following a weak profit forecast from Walmart, which warned of slowing consumer demand. Tech giants, often referred to as the Magnificent Seven, continued to face selling pressure, marking a shift in market leadership toward broader index components. In the commodities and bond markets, the 10-year Treasury yield eased to 4.20% as recession fears resurfaced. Gold prices rose to $2,867.30 per ounce, reflecting a flight to safety. Conversely, crude oil prices fell to approximately $70.00 per barrel, recording the first monthly decline in several months due to concerns over weakening global demand.