Market Recap* – February, 2026

1. What happened in the markets?

Canadian equities rose 7.72% in February, driven largely by strength in energy and materials. Escalating geopolitical tensions in the Middle East increased concerns about potential disruptions to global oil supply routes, pushing crude prices higher and directly benefiting Canadian energy producers. Gold prices also advanced as investors sought safe-haven assets, supporting mining and materials companies. Canada’s heavier exposure to commodities helped the market outperform even as global volatility increased late in the month.

U.S. equities declined 0.76% over the month, reflecting a more cautious macro environment. Rising oil prices late in the month renewed inflation concerns, which reduced confidence that interest rates would decline quickly. At the same time, investors reassessed valuations in growth and technology sectors, leading to volatility and some rotation toward more defensive areas. The combination of geopolitical risk, inflation sensitivity, and interest rate uncertainty contributed to the modest overall decline.

Canadian fixed income returned 1.66% for the month. Heightened geopolitical tensions increased demand for high-quality bonds, supporting prices as investors sought stability during periods of equity volatility.

Money market instruments delivered a steady 0.17% return. Short term government securities continued to provide consistent income with minimal price movement. This allocation remained a low-volatility anchor amid commodity price swings and geopolitical headlines.

The Canadian dollar slightly weakened in February. Although higher oil prices would typically support the Canadian dollar, stronger safe-haven demand for the U.S. dollar during heightened geopolitical tensions outweighed that eaect. Currency markets reflected a broader move toward safety into month end.

2. What does it mean for Embark Funds?

Asset class	Change	Impact on cohorts
Canadian Equities	↑	Positive for younger cohorts with higher equity exposure. Strong gains were driven by higher oil prices amid escalating Middle East tensions and rising gold prices, which supported energy and materials sectors.
U.S. Equities	↓	Slightly negative for younger, growth-oriented cohorts. Markets softened as rising oil prices renewed inflation concerns and reduced confidence in near-term rate cuts.
Bonds	↑	Benefited older and more conservative cohorts. Heightened geopolitical risk increased demand for high-quality fixed income, supporting prices and providing stability during equity market volatility.
Money Market	↑	Short-term government securities delivered steady income with minimal price movement amid global uncertainty.
Canadian Dollar	↓ CAD	The weaker Canadian dollar modestly benefited portfolios with foreign asset exposure. Although higher oil prices are typically supportive for CAD, stronger safe-haven demand for the U.S. dollar during geopolitical tensions outweighed that eaect.