U.S. equity markets ended Thursday, February 19, 2026, in negative territory, pressured by escalating geopolitical tensions between the United States and Iran and sharp declines in shares of alternative asset management firms following withdrawal restrictions at Blue Owl Capital.
The Dow Jones Industrial Average fell 0.54%, or 267.5 points, to close at 49,395.16. The Nasdaq Composite declined 0.31%, or 70.91 points, to 22,682.73, while the S&P 500 lost 0.28%, or 19.42 points, to 6,861.89.
The Cboe Volatility Index (VIX), widely known as Wall Street’s “fear gauge,” rose 3.11% to 20.23, reflecting heightened investor caution amid renewed Middle East uncertainty.
Geopolitical concerns dominated sentiment after U.S. President Donald Trump made pointed remarks on ongoing nuclear negotiations with Iran. Speaking to reporters earlier in the day, Trump stated: “It’s proven to be, over the years, not easy to make a meaningful deal with Iran, and we have to make a meaningful deal. Otherwise bad things happen.” The comments followed the second round of indirect talks in Geneva and came against the backdrop of a significant U.S. military buildup in the region, including deployment of the USS Abraham Lincoln carrier strike group and plans to send the USS Gerald R. Ford.
Oil prices reacted sharply to the perceived increase in risk. Brent crude futures rose more than 2% during the session, while West Texas Intermediate (WTI) crude also gained over 2%, reflecting fears of potential supply disruptions in the Persian Gulf.
In equity markets, the alternative asset management sector came under heavy selling pressure after Blue Owl Capital announced restrictions on withdrawals from one of its funds and disclosed plans to sell $1.4 billion in assets from three funds to meet liquidity demands. Blue Owl shares plunged 5.9%. The weakness spread to peers, with Blackstone down 5.4% and Apollo Global Management falling 5.2%. The sector’s sharp move raised broader concerns about liquidity strains in private credit and alternative investment vehicles amid higher interest rates and shifting investor sentiment.
Retail giant Walmart also weighed on sentiment. The company reported fiscal fourth-quarter revenue and earnings that beat Wall Street expectations, but its profit forecast for the current fiscal year fell short of analyst estimates. Walmart shares declined 1.4% in regular trading.
On the macroeconomic front, initial jobless claims in the United States dropped by 23,000 to 206,000 in the week ending February 14, coming in below market expectations and signaling continued labor-market resilience. However, the U.S. trade deficit widened significantly, rising 32.6% month-over-month to $70.3 billion in December 2025—the highest level since July 2025—driven by strong import growth.
Market breadth was mixed, with decliners outnumbering advancers on both the NYSE and Nasdaq. Volume was moderate, reflecting a cautious “wait-and-see” posture among investors ahead of key economic data releases and further developments in U.S.-Iran diplomacy.
Analysts noted that the combination of geopolitical risk premium in oil, sector-specific pressure in alternatives, and mixed macro signals contributed to the day’s modest pullback. While the major indices remain near all-time highs, the rise in the VIX above 20 indicates that volatility expectations have ticked higher in the near term.
Looking ahead, investors will monitor Friday’s release of U.S. flash manufacturing and services PMI data, continued commentary from Federal Reserve officials, and any updates from ongoing indirect nuclear talks between Washington and Tehran.
The session’s performance underscores the market’s heightened sensitivity to geopolitical headlines and sector-specific developments at a time when broader indices are trading near record levels.
