U.S. Markets React to Rising Tensions with Iran and Private Credit Concerns

U.S. markets experienced volatility on February 19, 2026, primarily driven by heightened tensions between Washington and Tehran. President Donald Trump announced he would decide within ten days whether to initiate military action against Iran, which is significant due to the country's vast oil reserves. This uncertainty has led to concerns about potential disruptions in global oil supply, causing oil prices to rise nearly 2% during U.S. trading hours and continuing to increase during Asian market hours.

Associated Press

The S&P 500 index fell by 0.28%, while the Dow Jones Industrial Average decreased by 0.54%, and the Nasdaq Composite dropped 0.31%. The decline in stock prices was exacerbated by worries surrounding the private credit market, particularly after Blue Owl Capital sold $1.4 billion in loan assets, raising alarms about liquidity and stability. The company's stock fell nearly 6%, impacting other asset management firms like Blackstone and Apollo Global Management.

CNBC

Despite the overall market downturn, certain companies like Walmart and Deere reported stronger-than-expected quarterly results, helping to mitigate broader losses. Walmart's stock rose 1.5%, while Deere surged 11.5% due to recovering demand from construction and smaller agricultural customers.

Associated Press

The potential for military conflict with Iran poses risks not only to oil supply but also to inflation rates in the U.S. If oil prices continue to rise, inflation could be affected, prompting the Federal Reserve to reconsider its interest rate policies. Recent reports indicated a slight easing in unemployment benefit applications, suggesting a stable job market, which could influence the Fed's decisions on rate cuts.

Associated Press

Analysts have expressed concern over the market's reaction to the threat of AI disruption across various industries. Companies perceived as vulnerable to AI advancements have faced significant stock declines, with some likening the market's response to a "shoot first-ask questions later" mentality. This sentiment reflects a broader anxiety about the implications of AI technology on traditional business models.

CNBC

While the overall market trend showed declines, specific sectors, particularly oil companies, saw gains due to rising crude prices. Occidental Petroleum, for instance, experienced an 8.8% increase after reporting strong quarterly profits. However, discrepancies exist regarding the extent of the impact of these tensions on different sectors, with some companies performing well despite the overarching market decline.

Associated Press

• “This is a canary in the coal mine,” — Dan Rasmussen, Founder and Adviser at Verdad Capital

CNBC

• “If a conflict were to break out, it could constrict the global flow of oil.” — AP News Report

Associated Press

• “Fed officials said at their last meeting that they want to seeinflation fall furtherbefore they would support cutting rates further this year.” — Federal Reserve Officials

Associated Press

As the situation develops, market participants will be closely monitoring both geopolitical events and economic indicators to gauge future trends.

Associated Press