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    In February, the US S&P Global Composite PMI slipped from 53 to 52.3, reflecting slower activity

    by VT Markets
    /
    Feb 20, 2026
    The United States S&P Global Composite PMI fell to 52.3 in February. It was 53 in the previous reading. A reading above 50 indicates expansion. A reading below 50 indicates contraction.

    Composite Pmi Signals Slower Growth

    The Composite PMI slipped to 52.3. It still points to growth, but it also shows the economy is losing speed. When growth cools, uncertainty often rises. That can lead to more market volatility. The VIX, a key fear gauge, is near 15 now. But in similar PMI pullbacks in 2025, it climbed toward 20 as uncertainty increased. A slower economy can also ease pressure on the Federal Reserve to keep rates high. In the fed funds futures market, the chance of a rate cut by the third quarter is now above 60%. That is up from about 45% a month ago. This change suggests it may make sense to position for a more accommodative Fed in the interest rate derivatives market. For investors managing equity exposure, the slowdown is a reason to think about protection in the weeks ahead. A similar PMI drop in Q2 2025 came before a 5% pullback in the S&P 500. That makes near-term put options on indices like the SPX a practical hedge. Even reasonably priced puts can help limit downside if the cooling trend continues.

    Sector Positioning In A Cooling Economy

    This setup also calls for more selective sector positioning. Not every part of the market reacts the same way. Options on sector ETFs can help tilt exposure toward defensive areas like consumer staples (XLP) and utilities (XLU), and away from more economically sensitive sectors like consumer discretionary (XLY). In the last slowdown in 2025, these defensive sectors outperformed by a clear margin over the following quarter. Create your live VT Markets account and start trading now.

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