Morning Brew February 19 2026

Good morning,

Precious metals are climbing, largely fueled by rising tensions and an increasing likelihood of a heated confrontation between the U.S. and Iran. Russian Foreign Minister Lavrov has warned the U.S. against attacking Iran. Gold prices have edged up this morning, moving above the psychologically important 5,000 mark, while silver stands at 78.80. U.S. President Donald Trump will preside over the inaugural meeting of his Board of Peace today. It would be cynical if an intervention in Iran were to occur on the same day.Polymarket trades the odds of an escalation in February with app 30%. 

Federal Reserve policymakers were nearly unanimous in their decision to keep interest rates on hold at last month's meeting. However, they remain divided on future actions: "Several" are open to rate hikes if inflation stays elevated, while others favor further cuts if inflation recedes as expected. The entire committee is also grappling with the emerging implications of artificial intelligence for the economy.

The Nasdaq 100 gained 0.8%, the S&P 500 added 0.5%, and the Dow rose 0.2%. Traders continue to anticipate multiple rate cuts this year, though Fed minutes show concerns that disinflation may remain slow. Nvidia advanced 1.6% after Meta announced plans to deploy millions of its chips, helping offset recent doubts about AI spending. Amazon and Micron climbed 1.8% and 5.3%, respectively, driven by increased institutional holdings. Palo Alto Networks fell 6.8% on weak forecasts, while Moderna climbed about 6% after the U.S. Food and Drug Administration agreed to review its influenza vaccine.

European stocks climbed yesterday, nearing record highs, supported by strong defense-sector gains and speculation about leadership changes at the ECB. The Stoxx 50 rose 0.4% to 6,050, and the Stoxx 600 added 0.5% to 625. Defense shares gained over 2%, led by BAE Systems’ nearly 6% jump after stronger-than-expected profit. Sentiment improved further on reports that Germany may take a minority stake in KNDS ahead of its listing. The Financial Times also reported Christine Lagarde may step down before France’s 2027 election. Carrefour dropped 5% after weaker operating profit, as investors awaited Fed minutes.

Nestle reported better-than-expected fourth-quarter sales growth on Thursday and said it was sharpening its focus. The company expects 2026 full-year organic sales growth in the range of 3-4%, and forecasts an improvement in its underlying trading operating profit margin this year.
Zurish beat expectations

Rio Tinto reported flat annual earnings on Thursday, missing expectations as weaker iron ore prices weighed on its core business. However, stronger copper prices and higher output helped limit the impact.

Airbus says it is facing "significant shortages" of engines from Pratt & Whitney.

U.S. 10-year yields are back at 4.10%, and the USD Index stands at 9,770. EURUSD is below 1.18, GBPUSD just below 1.35, and USDJPY has risen to 155.10. After the Fed minutes, the overall rate outlook remains unchanged: the first U.S. rate cut is priced in between June and July, with projections for 2-3 cuts by year-end. The Bank of England is expected to cut rates twice this year, starting in March, while any action by the ECB would surprise traders.

Today's market driver is likely to be any hint of de-escalation or escalation in Iran. If the situation remains calm, Walmart, miners, and initial jobless claims will be in focus.

Trade safely.

Thursday, Feb 19

Economic Events

• Italy/France/Germany: Flash PMIs (prelim).
• US Initial Jobless Claims
• China Markets closed

Earnings Releases

• Walmart, First Majestic Silver, John Deere, Klarna, Wayfair, Transocean, Newmont, Centerra Gold

Speaker:  Bostic, Bowman, Kashkari

Friday, Feb 20

Economic Events

• Japan CPI
• US: GDP Q4 final, PCE inflation (key).
• Germany/Eurozone/UK/US: Flash PMIs.
• UK: Retail sales.
• China Markets closed
•  

Earnings Releases

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