Pre-market trading indicators showed a decline across the three major U.S. stock index futures on Tuesday, February 17th. At the time of writing, Dow Jones futures were down 0.01%, S&P 500 futures had decreased by 0.22%, and Nasdaq futures fell by 0.73%.
In European markets, the German DAX index rose 0.18%, the UK's FTSE 100 index gained 0.60%, France's CAC 40 increased by 0.18%, and the Euro Stoxx 50 index was up 0.01% at the time of writing.
Regarding commodities, WTI crude oil advanced by 1.80% to $63.88 per barrel. Brent crude increased by 0.45%, reaching $68.96 per barrel.
Market news centered on Iran and the United States commencing a second round of nuclear negotiations in Geneva. The talks, held in Switzerland on Tuesday and mediated by Oman, aimed to prevent renewed conflict in the Middle East. The session began around 10:30 AM local time. The previous round of discussions in Muscat, Oman, lasted approximately seven hours, with both sides describing them as "proceeding smoothly." Iranian officials have expressed willingness to discuss their nuclear enrichment activities but have linked any concessions to the potential easing of U.S. sanctions. Concurrently, Washington is bolstering its military presence in the Middle East, deploying a second aircraft carrier to the region amid warnings that strikes on Iran could occur if the negotiations fail to yield a compromise.
Former President Donald Trump's signals regarding the talks have contributed to a cooling of risk-off sentiment, putting pressure on gold prices, which fell by 1% at one point. Trump confirmed his indirect involvement in the second round of talks while speaking aboard Air Force One. He acknowledged Iran's tough stance as a negotiator but also suggested that Tehran has shown unprecedented willingness for dialogue following last year's targeted U.S. strikes on Iranian nuclear facilities. This shift from confrontation toward diplomacy is causing the "war premium" that previously supported gold prices to diminish. Investors widely anticipate that substantial progress in the Geneva talks could further erode gold's appeal as a safe-haven asset.
A Bank of America survey indicated that market sentiment remains "extremely bullish," but further asset price appreciation in the first quarter may be challenging as most participants have already positioned for gains. The bank's "Global Fund Manager Survey," led by strategist Michael Hartnett, revealed that investor allocations to commodities reached a net 28% overweight, the highest since May 2022. Equity allocations rose to a net 48% overweight, the highest since December 2024. Bond allocations showed a net 40% underweight, the highest since September 2022. Cash levels saw a slight increase to 3.4%, up from a record low of 3.2% the previous month.
Weak employment data has revived expectations for interest rate cuts, with markets now pricing in two rate cuts by the Bank of England within the year. The UK unemployment rate rose to a near five-year high in the last quarter, and wage growth slowed, prompting traders to increase bets on monetary easing. Data from the UK's Office for National Statistics showed the unemployment rate climbed to 5.2% in Q4, exceeding median analyst forecasts. The private sector regular pay growth rate, a key metric for the Bank of England, slowed to 3.4%, its lowest level in over five years. Money markets are now fully pricing in two 25-basis-point cuts by year-end, which would bring the benchmark rate down to 3.25% for the first time in this easing cycle. At the beginning of the month, the probability of this scenario was only 50%.
According to Goldman Sachs, hedge funds are buying into Asian markets at the fastest pace in a decade. Fueled by optimism surrounding artificial intelligence infrastructure companies, net buying of emerging and developed Asian markets last week reached the highest level since Goldman Sachs began tracking the data in 2016. Exposure to Asian equities has risen to its highest level since at least 2016. A Goldman Sachs report noted that hedge funds became net buyers of global equities last week for the first time in three weeks, with inflows across all major markets, but Asia was the standout performer. Hedge funds concentrated their bullish bets on South Korea and China, while India saw "modest selling."
In individual stock news, Medtronic PLC reported third-quarter revenue of $9.0 billion, a year-over-year increase of 8.7%, surpassing expectations by $110 million. Adjusted earnings per share were $1.36, beating estimates by $0.02. The company reaffirmed its fiscal 2026 organic revenue growth guidance of approximately 5.5%. Its adjusted EPS guidance for fiscal 2026 is set between $5.62 and $5.66, below the consensus estimate of $6.12. This guidance includes a potential tariff impact of approximately $185 million, consistent with prior expectations. Excluding this potential impact, the guidance implies approximately 4.5% growth in adjusted EPS for fiscal 2026.
BHP Billiton announced that earnings from its copper business surpassed those from iron ore for the first time, with half-year net profit surging by 28%. Benefiting from soaring copper prices driven by the global electrification transition and record output from core operations, BHP Billiton delivered strong financial growth for the period. Underlying profit reached $6.20 billion, a 22% year-over-year increase, significantly exceeding the average analyst estimate of $6.03 billion. Revenue grew by 11% to $27.90 billion, while net profit attributable to shareholders jumped 28% to $5.64 billion. Based on robust cash flow, BHP Billiton declared an interim dividend of 73 cents per share, a nearly 50% increase from the 50 cents per share a year earlier, maintaining a high payout ratio of 60%.
Danaher is nearing an agreement to acquire medical technology company Masimo for approximately $10 billion. If negotiations proceed smoothly, a deal could be announced as early as Tuesday. The acquisition price represents a significant premium to Masimo's market capitalization of nearly $7 billion at Friday's close. Masimo, a leading manufacturer of pulse oximeters used to measure blood oxygen levels, has been engaged in a long-standing intellectual property dispute with Apple, alleging patent infringement by Apple Watch. The acquisition of Masimo would be Danaher's largest deal in over five years, since its $21.4 billion acquisition of biomanufacturer Cytiva.
General Mills lowered its annual sales and profit forecasts, citing weak consumer sentiment. The company now expects full-year sales to decline between 1.5% and 2%, compared to a previous forecast range of a 1% decline to 1% growth. On a constant-currency basis, adjusted operating profit and adjusted earnings per share are now projected to decline between 16% and 20%, versus a previous expectation of a 10% to 15% decline.