17 Feb 2026 - Glenmore Asset Management - Market Commentary

Global equity markets kicked off the new year in volatile fashion, driven by geopolitical concerns over Greenland, Venezuela and Iran. This provided a boost to Resources, which drove the ASX All Ordinaries Accumulation Index up +1.6% for the month. This represented a slight outperformance vs the S&P 500, which rose +1.4%. However, the NASDAQ underperformed most global benchmarks (+0.9%), as fears over disruption caused by Artificial Intelligence (AI) weighed upon the Tech sector. Outside of the US, the FTSE 100 and Euro Stoxx 50 continued their strong run, rising +2.9% and +2.7%, respectively.

The ASX experienced a particularly volatile month, which was more pronounced in the small-cap segment of the market. Energy and Gold were the strongest performing sectors, whilst Technology was the weakest performer, impacted by concerns about AI disruption. During the month, the ASX Small Ordinaries Accumulation Index rose +6.0% at its peak, before falling over -3% in the final week of the month, to finish +2.7% higher. In addition to the factors noted above, we believe the small-cap segment was disproportionately impacted by two events, being (1) stronger-than-expected Australian inflation data, which supported the RBA's subsequent February 2026 rate increase, and (2) a sharp reversal in commodity prices following the appointment of Kevin Warsh as the new Governor of the US Federal Reserve. Regarding monetary policy in Australia, the market expects 1- 2 more RBA rate hikes over the next 12 months.

In bond markets, the US 10-year bond yield rose +7 basis points (bp) to 4.24%, whilst its Australian counterpart rose +7bp to 4.81%. The Australian dollar had a strong month, rising +4.4% to US$0.70, implying an increase of 2.9 cents.