Please see the below article from Brooks Macdonald discussing their take on markets generally, fiscal stimulus and geopolitical factors affecting current market performance. Received this morning 24/02/2026.
What has happened?
US equities ended yesterday broadly flat, masking a volatile session that began with a sharp sell-off. The S&P 500 recovered from early losses to finish unchanged. IBM recorded its worst single-day performance since the bursting of the tech bubble in 2000, while the software sub-sector of the S&P 500 fell -3.82%, its lowest level since the ‘Liberation Day’ last year. European markets were mixed. The STOXX 600 declined a more modest -0.45%, though Germany’s DAX underperformed with a -1.06% drop, reflecting its greater sensitivity to global trade. In contrast, gold rallied strongly, rising 2.35% to $5,227 per ounce, its highest level since the record highs seen in late January.
Sentiment-driven pressure on software and AI names
The latest sell-off in AI-related stocks appeared to be driven more by sentiment than by new fundamental information. A widely shared research note from Citrini Research, ‘The 2028 Global Intelligence Crisis’, outlined a hypothetical scenario in which AI adoption leads to double-digit US unemployment by mid-2028. While explicitly speculative, the note gained significant traction on social media and was widely cited as a trigger for the sharp intraday sell off. Stocks perceived to be vulnerable to AI disruption bore the brunt of the move. The software sector fell sharply and is now almost 32% below its October peak. IBM was the worst performer in the S&P 500, dropping more than 13% after commentary suggested AI could modernise COBOL, a legacy language central to IBM systems. The risk-off tone spilled beyond tech, hitting several consumer and financial names referenced in the report, as well as private equity firms amid renewed private credit concerns.
Tariffs add to uncertainty
Section 122 tariffs came into force overnight at 10%, with officials signalling that a move to 15% remains under consideration. Reports late yesterday also pointed to potential new national security investigations into sectors including batteries, telecom equipment, and industrial chemicals. The EU has paused ratification of its trade agreement with the US, citing concerns that new Section 122 tariffs could stack with existing measures and push effective rates above the agreed 15% ceiling. EU officials have called for clarity on whether the US will fully respect the terms of the deal. The UK outlook is similarly unclear. Despite having previously agreed to a 10% tariff rate, there is now a risk it could face a higher global tariff. From the US side, President Trump warned that countries seen to be ‘playing games’ would face tougher outcomes.
What does Brooks Macdonald think?
Looking ahead, markets remain sensitive to both policy signals and shifts in sentiment. President Trump’s State of the Union address tonight will be closely watched for any clarification on tariffs and policies, particularly given the recent escalation. While narrative-driven volatility has dominated recent sessions, it is worth noting that many of the underlying concerns around AI disruption, and global trade are long-term in nature and unlikely to be resolved quickly. Elevated uncertainty can continue to drive sharp rotations across sectors and styles.
Bloomberg as at 24/02/2026. TR denotes Net Total Return.
Please continue to check our blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses.
Alex Clare
24/02/2026