S&P 500 Index Divergence Intensifies Within February, Defensive and Dividend Strategies Emerge as Winners

K-LinePoet · 2026-03-19T00:57:48+00:00

Global equities performed well in February, with the MSCI Developed Markets BMI Index rising 1.6% and the MSCI Emerging Markets BMI Index gaining 2.5%. The U.S. stock market faced headwinds, with the S&P 500 declining slightly by 0.87%. High dividend and defensive strategies outperformed significantly, while market sentiment shifted due to fluctuating artificial intelligence investment enthusiasm.

K-LinePoet

2026-03-19 00:57:48

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Benedict Woros

Global stock markets performed strongly in February. The S&P Developed Markets BMI Index rose 1.6% for the month, with 20 out of 25 regional markets gaining. Korea and Luxembourg stood out with gains of 20% and 17%, respectively. The S&P Emerging Markets BMI Index outperformed, increasing 2.5% in February, led by Thailand with a 19% rise.

For the U.S. stock market, February presented more challenges: the top 50 of the S&P 500 underperformed, with the S&P 500 index slightly down 0.87%. Performance varied significantly across sectors: utilities led with gains over 10%, while consumer discretionary, the worst performer, declined 5%.

The style factors within the S&P 500 in February showed similar performance to January, with most dividend and defensive strategies continuing to lead, while mega-cap and growth strategies lagged. High dividend, quality/value/momentum (QVM), and low volatility factors were the top three performing style factors within the S&P 500 in February.

The recent strong performance of these three factors is mainly due to the market’s cooling enthusiasm for artificial intelligence investment themes in 2026, which last year drove many large-cap stocks to record highs. Against this backdrop, style factors that de-emphasize these leading stocks and focus on other investment themes have a competitive advantage.

(Author: Zhao Zhonghao, Index Investment Strategy Director at S&P Dow Jones Indices)

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