Market Insights February 23, 2026

Oil: A rebound driven by tensions in the Middle East.

Oil prices have rebounded by more than 20% from the lows reached in December, supported by escalating geopolitical tensions in the Middle East. Brent crude now exceeds USD 70 per barrel, a level that largely reflects the uncertainty surrounding Iran. Discussions between Tehran and Washington are ongoing, particularly with regard to nuclear and ballistic programmes, yet their outcome remains highly uncertain.

At present, oil prices incorporate a risk premium estimated at approximately 10% relative to underlying fundamentals. A de-escalation between the United States and Iran could swiftly eliminate this premium. Conversely, any further surge in crude prices would depend on military developments, as the market currently appears to be pricing in a scenario of limited escalation. A more pronounced and sustained increase would likely require an extreme shock, such as a prolonged closure of the Strait of Hormuz; absent such a development, any additional upside in oil prices should prove temporary.

The Supreme Court strikes down the ‘reciprocal’ tariff policy  

The ruling by the United States Supreme Court in Learning Resources Inc. v. Trump marks a significant turning point in the protectionist phase initiated in 2025. By a six-to-three majority, the Court held that the President lacked the requisite authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). Relying on the “major questions doctrine,” it reaffirmed that any economic policy measure of substantial magnitude, such as the imposition of broad-based tariff barriers, requires explicit congressional authorisation. Beyond the legal reasoning, the institutional message is unequivocal: the separation of powers remains an effective safeguard.

 In practical terms, the decision invalidates all so-called “reciprocal” tariffs, as well as those linked to fentanyl, while leaving existing statutory trade mechanisms unaffected. Market reaction was moderately positive, as the outcome had been largely anticipated. Nevertheless, two immediate implications warrant particular attention.

First, numerous trade agreements negotiated on the basis of IEEPA-related tariffs find themselves weakened. With their legal foundation effectively removed, their formalization may be delayed or even subject to renegotiation, as the administration turns to alternative instruments that are both more procedurally demanding and more time-consuming to implement. Second, the issue of reimbursing duties already collected, estimated at nearly $140 billion for 2025, opens the door to potentially lengthy and costly litigation, likely to increase budgetary uncertainty.

From a macroeconomic perspective, the theoretical average level of U.S. tariffs is expected to decline mechanically, falling from approximately 17% to close to 13%. Emerging economies that have thus far been subject to elevated tariff rates, most notably China, India, Brazil and Vietnam, appear to be the main relative beneficiaries in the near term, while certain sectors already targeted by specific measures (automobiles, steel and semiconductors) remain exposed.

For investors, several key implications emerge. First, the ruling reduces the institutional risk premium associated with U.S. assets, reaffirming the strength of the rule of law. Second, trade-related uncertainty remains elevated: the reconfiguration of tariff instruments is likely to generate differentiated outcomes across countries and sectors. As a result, the prevailing environment of heightened financial market volatility is likely to persist. The pronounced sectoral rotation observed across global equity markets may intensify further, particularly on Wall Street. At the same time, a potential widening of the U.S. fiscal deficit, stemming from lower tariff revenues, could add to downward pressure on the U.S. dollar.

This week's figure: 50.7

The German manufacturing PMI has risen above the 50 threshold, signalling an expansion in manufacturing activity for the first time since 2022. The marked acceleration in new orders suggests that fiscal stimulus measures are beginning to generate tangible positive effects.