MARKET WRAPS
Watch For:
U.K. CPI, PPI; trading updates from BAE Systems, Glencore, Euronext, Orange, IMCD, Naturgy Energy, ASR Nederland, PUIG
Opening Call:
European stock futures traded higher early Wednesday. Asian stock benchmarks were higher; the dollar was up; Treasury yields were flat; while oil futures inched higher and gold strengthened.
Equities:
Stock futures point to a higher open in Europe on Wednesday, after tech stocks paused their recent slide on Wall Street overnight.
Investors in recent weeks have seesawed between concerns that the artificial intelligence trade has run its course and fears that the technology could disrupt industries ranging from software to financial data to trucking.
"It is likely that we will look back on the current volatility as a buying opportunity, though it's difficult to estimate when the volatility will be behind us," said Louis Navellier, chief investment officer at Navellier & Associates.
Investors will also be looking to the release of Fed minutes later in the day for direction.
Forex:
The sterling could weaken further against the euro due to a weaker U.K. growth outlook compared to the eurozone, Danske Bank analyst Kirstine Kundby-Nielsen said.
This is further amplified by the U.K. tightening fiscal policy versus the eurozone's fiscal expansion, she said. Danske expects the Bank of England to cut rates again in April and November, but sees risks of cuts being delivered sooner. In contrast, it expects the European Central Bank to leave rates on hold throughout 2026 and 2027.
"We forecast [the euro] to move higher towards 0.89 [pounds] on a 6-12-month horizon," Kundby-Nielsen said.
Bonds:
Treasury yields hit 2026 lows overnight, signaling higher demand and rising prices for Treasurys. The artificial intelligence hype has made some investors uneasy about stocks and nudged them toward the perceived safety of government bonds.
"Investor exhaustion of new narratives to justify stretched risk asset valuations led to a broadening out and into Treasurys," said Martin Tobias, a strategist at Morgan Stanley.
That rotation, combined with the recent data showing softer inflation, reinforces the case for even lower yields ahead, Tobias said.
Energy:
Oil futures consolidated as traders assessed U.S.-Iran developments. Vice President JD Vance said Iran had failed to acknowledge core U.S. demands in talks on Tuesday, after which Washington said it had agreed to give Tehran two weeks to close the gaps between the sides.
However, the U.S. and Iran continued to raise pressure, Westpac Strategy Group said. Iran appeared to be conducting live fire operations in the Strait of Hormuz, while another U.S. aircraft carrier is expected to join the Abraham Lincoln in the Middle East in late March or April, Westpac added.
Metals:
Gold strengthened on a likely technical recovery after front-month gold futures fell overnight.
"Thinner liquidity amid holidays in major markets could exacerbate short-term price swings," Kudotrade's Konstantinos Chrysikos said. However, the broader outlook for gold remains mostly intact, the head of customer relationship management said.
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After a few painful years, Wall Street sees a brighter future for lithium. Benchmark lithium prices are about $20,000 a metric ton, up from less than $9,000 six months ago.
Lithium prices peaked at about $84,000 a ton in late 2022, boosted by rising demand from electric vehicles. But while lithium production expanded, growth in demand for EVs slowed, pushing lithium prices lower. Now, rising demand for utility-scale battery storage has pushed lithium prices back up.
TODAY'S TOP HEADLINES
Fed Minutes Could Show Higher Bar for Rate Cuts as Inflation Lingers. What to Watch.
The Federal Reserve will release the minutes of its January meeting Wednesday at 2 p.m. Eastern, offering investors a detailed look at how close-or far-policymakers believe they are from cutting rates again.
When officials met in late January, they left the federal-funds rate unchanged at 3.5% to 3.75%, pausing after three rate cuts late last year. Since then, economic data have complicated the outlook. Inflation remains above the Fed's 2% target and employment has somewhat stabilized. Growth, meanwhile, appears solid.
Fed's Barr Wants Proof Goods Inflation Is Retreating Before Additional Rate Cuts
Federal Reserve governor Michael Barr said he wants to see evidence that goods price inflation is sustainably retreating before considering additional rate cuts.
Speaking at the New York Association for Business Economics on the labor market and artificial intelligence on Tuesday, Barr said the job market might be "especially vulnerable to negative shocks," given low levels of job creation and a low firing rate. For now, there seems to be a tentative balance in labor supply and demand, but it is a delicate balance, Barr said.
Spain to Probe X, Meta, TikTok Over AI Images
The Spanish government said it was requesting prosecutors to investigate X, Meta Platforms and TikTok for potential crimes against minors in relation to AI-generated images, ramping up scrutiny of how tech giants run their platforms as artificial intelligence becomes increasingly powerful.
A government minister said Tuesday that some 3 million AI-generated nude images, including depictions of minors, had proliferated online in just under two weeks and that Madrid was asking the public prosecutor's office to look into potential offenses such as child pornography and the degrading treatment of minors.
Novo Nordisk's Wegovy Weight Loss Shot Approved at Higher Dose in EU
Novo Nordisk received final approval for a higher dose of its Wegovy weight-loss shot from the European Commission.
Approval of the higher 7.2 milligram dose of Wegovy means that doctors in the EU can now prescribe three 2.4 milligram injections in one sitting, once a week.
Vance Says Iran Is Ignoring Core U.S. Demands in Talks
GENEVA-Vice President JD Vance said Iran had failed to acknowledge core U.S. demands in talks here Tuesday, after which Washington said it had agreed to give Tehran two weeks to close the gaps between the sides.
Ahead of the negotiations, Tehran had indicated it was willing to compromise around the edges of its nuclear program, including moving its near weapons-grade uranium offshore, people familiar with the matter said.
Bayer Proposes New $7 Billion Plan to Settle Roundup Litigation
Bayer is making a new multibillion-dollar push to resolve a yearslong legal nightmare over Roundup weedkiller.
The German pharmaceutical and agriculture conglomerate on Tuesday said it proposed to settle a nationwide class-action lawsuit to resolve claims that its flagship herbicide causes cancer. The settlement plan includes setting aside more than $7 billion to fund payments over 21 years.
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Expected Major Events for Wednesday
07:00/UK: Jan Producer Price Index
07:00/UK: Jan CPI
07:45/FRA: Jan CPI
09:30/UK: Dec UK House Price Index
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(END) Dow Jones Newswires
February 18, 2026 00:01 ET (05:01 GMT)
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