Vitti Capital Markets Update – February 2026

Opening Snapshot

Global markets have had a very strong February.

The US Federal Reserve stayed on hold at its late-January meeting, but the minutes made one thing clear. Policymakers are split on what comes next.

Some are open to hikes if inflation refuses to cool. Others want cuts if disinflation returns. Even AI made its way into the debate, with productivity optimism on one side and asset-valuation risk on the other.

Geopolitics kept a bid under energy. Oil ripped on renewed Middle East tension, and that fed straight back into the inflation narrative. Gold regained strength, which usually tells you investors are still hedging even while equities grind higher.

So the global mood was cautious risk-on.

February for Vitti Capital

We have worked with Braiin Limited (NASDAQ – BRAI) as a corporate advisor from the time they sojourned to fund their working capital 3 years back. We’ve walked with them as mergers & acquisitions (M&A) advisors as we assisted them in successfully acquired 2 accretive and synergistic companies.

Fast forward to February 2026, they debuted on NASDAQ at a US$1.3 Billion+ valuation. We continue with our engagements as they progress through very exciting times.

Australian Market

The ASX came into February just below 9,000 and quickly made a statement. Earnings season delivered enough beats to overwhelm the rate hike angst, and the index pushed to fresh highs.

On 18 February the ASX 200 (XJO) closed at 9,086, just shy of its prior peak. By 25 February it closed at 9,128, a new record. On 26 February the XJO traded above 9,200 intraday and was last around 9,175.

From strength to strength.

This is important for one reason. The market just rallied through a tightening cycle. That does not happen when liquidity is collapsing. It happens when corporate earnings and positioning can absorb the shock.

We already had a healthy pullback in November, when the idea of rate hikes was finally accepted. The weak hands have folded and there’s been plenty of time for repositioning.

That gives us more confidence that the Australian market is robust and healthy.

The price action also tells you where the leadership sits. Banks and miners are the spine of this market. When they run, the index runs.

Technically, the 9,000 handle has flipped from resistance into a battleground support zone. If it holds, the path stays higher. If it fails, we are back into chop, and potentially another November-style moderate pullback.

ASX 200 Index (ASX:XJO) Chart (Source: TradingView)

Inflation and Interest Rates

We noted last month that the RBA was under ‘immense pressure’ to hike rates.

And they did just that, lifting the cash rate by 25 basis points to 3.85%. The messaging was hawkish (higher rates to come).

Now the market is staring at May for the next hike, with a third hike this year 80% priced in by November.

Rate expectations matter more than the rate itself in the short term. Higher-for-longer compresses valuation multiples first. Earnings feel it later.

In the background, the labour market stayed firm. Unemployment remained around 4.1% and jobs growth continued. That resilience is great for earnings, but it makes the inflation fight harder.

Runaway inflation remains one of our key risks to watch for 2026.

Sector Themes

Financials

Banks did what banks do in a tightening tape. They outperformed.

Higher rates support margins, as long as credit quality holds. February’s results and updates reinforced the idea that arrears are contained and capital levels remain strong.

That is why the sector kept pulling in flows.

Just remember the trap. Banks look invincible right before the economy slows. The first sign of trouble usually shows up in forward guidance and credit commentary, not in headline profit numbers.

The smaller finance players are also delivering great results.

Commodities

Resources remained split.

Copper strength supported the big, diversified miners. Investors are looking through short-term noise and focusing on structural supply constraints.

Copper Futures (COMEX:HG1!) Chart (Source: TradingView)

Gold remained firm, which signals underlying hedging behaviour.

Oil moved on geopolitics, and energy equities moved with it. The risk is second-order. Higher oil feeds inflation expectations, which feeds central bank caution, which feeds valuation pressure.

Technology

Tech was a reminder that this market rewards execution and punishes dreams.

High-multiple growth remains sensitive to bond yields. When yields push higher, the discount rate does the damage.

But the dispersion was the real message. Strong operators with credible plans bounced hard. Weak prints got smashed.

This is a market where quality tech can still win. Entry price matters, and earnings proof matters even more.

Consumer

Consumer discretionary stayed fragile.

The cost-of-living squeeze is still real, and higher mortgage rates are a slow bleed. Spending is selective. Retailers with pricing power and clean inventories can hold the line. Everyone else fights for margin.

Staples are the relative safe harbour, but even there, political heat is building. When households are angry, grocers become targets.

Standout Stocks and Stories

Woolworths (ASX:WOW)

Wow indeed.

Woolworths ripped higher on the back of a strong H1 FY26 result. NPAT before significant items increased an impressive 16.4% to $859 million. The interim dividend was lifted 15.4% to 45 cents.

At $35.85, the stock is being treated as more than a defensive. It is being rewarded for execution, cost discipline, and renewed momentum in Australian Food, with market share stabilising and eCommerce sales up 14.6%. In a tape that is unforgiving of soft numbers, WOW delivered hard ones, and the market responded accordingly.

BHP (ASX:BHP)

BHP at $58.07 is a direct expression of global industrial confidence. Copper strength is doing the heavy lifting, and the market is increasingly valuing BHP as a future-facing electrification play rather than just an iron ore proxy.

Iron ore near US$100 keeps margins thick, but copper is the narrative driver. The stock has responded accordingly, grinding higher into the back end of the month.

Telix Pharmaceuticals (ASX:TLX)

Telix at $10.00 remains one of the most intriguing and most battered growth names on the ASX. The stock has been sold down hard from prior highs as investors fixate on flat quarter-on-quarter revenue and broader biotech volatility.

Yet the underlying thesis has not cracked. Radiopharma remains a structural growth category, and Telix continues expanding distribution, acquisitions and product depth. The market is punishing the near-term optics.

Long-term investors are watching pipeline execution and regulatory milestones. When sentiment turns in biotech, TLX is the type of name that can re-rate quickly, but until revenue acceleration is undeniable, it will trade like a coiled spring.

March Outlook for the ASX – Key Themes and Risks

Global central banks are key to watch in March. The Fed meets mid-March and will update projections. Markets will be listening for any shift in the balance of risks.

At the moment the inflation story is just an Australian story. It’s not global. And that’s why markets are happy to shrug it off. If it develops into a broader theme, we may end up having a problem.

Reporting season is well under way. If guidance starts getting cut, sentiment shifts quickly. So keep an eye on the tone of earnings season updates.

The bull case is straightforward. Inflation cools enough to calm the RBA, yields stabilise, earnings stay resilient, and the index holds above 9,000.

The bear risk is that inflation stays sticky, policy tightens again, yields rise, and consumer-facing earnings start to crack.

This market can keep rallying, even with another two hikes this year. Any more than that will be a test.

In Summary

February was a reminder that markets can rally even while policy tightens, as long as earnings and positioning can handle it.

Australia pushed to record highs despite an RBA hike to 3.85%. Inflation stayed at 3.8% year-on-year into January, and underlying pressure edged higher.

The message is not fear. The message is selectivity.

Banks and miners are still carrying the tape. Quality cashflow is being rewarded. Anything that relies on cheap capital is getting tested.

March will be driven by inflation, yields, and guidance.

Stay disciplined. Stay selective.

As always, don’t forget to check out our stock recommendations, CEO interviews and other articles at themarketsiq.com.

Happy investing