MARKET WRAPS

Stocks:

European indexes rode a boost in market sentiment, tracking Asian and U.S. peers higher.

Earnings boosted HSBC and St James's Place--helping the FTSE 100 gain--and miners in London also rose with metal prices.

Across Europe, banks recovered from Tuesday's declines, and energy stocks also rose.

Nvidia is due to report after the U.S. market close and ING said risky assets-including currencies-could fall if the world's largest company by market capitalization's earnings misses expectations.

"With some investor unease around AI stocks still lingering, Nvidia will probably need to beat consensus and offer strong guidance to provide meaningful reassurance."

In his final public appearance as president of the Federal Reserve Bank of Atlanta, Bostic delivered a warning: U.S. inflation has stalled, and the Fed's credibility was at risk.

He said there was a possibility inflation would settle closer to 3%--above the Fed's 2% goal--and that households and businesses would start to treat that as normal.

Meanwhile Fed Governors Waller and Cook made clear Wednesday that the AI boom wasn't a shortcut to lower interest rates.

Market Insight

The U.S. IPO market finally started to look up for tech companies last year, but it seems AI fears have spoiled the party.

Big names including SpaceX, OpenAI and Anthropic are readying debuts, with that momentum creating an opening for dozens of smaller, private-equity backed software firms that had been waiting in the wings.

But persistent fears that AI will upend the software industry mean that most private tech companies-many that have spent years biding their time-will be forced to keep waiting.

U.S. Markets:

Trump's State of the Union speech drew a muted response from investors Tuesday evening and Nasdaq-100 futures led small gains early, ahead of earnings from retailers Lowe's and TJX, Bank of Montreal and Nvidia.

Forex:

The dollar edged lower against a basket of currencies.

Bonds:

Treasury yields were slightly higher, with the curve steepening modestly and little reaction to the State of the Union speech.

"President Trump declared a booming economy and a 'golden age' message at the same time as delivering several combative attacks on Democrats and the Supreme Court," Danske Bank said.

Bunds and other eurozone government bonds should remain well supported amid geopolitical concerns, tariff uncertainty and a favorable flow pattern, Commerzbank said.

"While uncertainty over tariffs lingers on, Trump's latest comments add to the notion that he remains committed to finding ways to maintain broad-based tariffs on different legal grounds."

SocGen said the eurozone rates market was slowly approaching overstretched levels as risk-off in equities and uncertain geopolitics around Iran supported the safety value of bonds.

Separately, SocGen said it entered a tactical trade in JGBs , expecting the five-to 30-year curve to steepen to 188 basis points from SocGen's entry level of 176 bps, with a stop at 168 bps.

Energy:

Oil prices edged higher as markets remained highly sensitive to developments in the Middle East, continuing to factor in a sizable risk premium ahead of U.S.-Iran talks.

"Oil prices weakened yesterday amid hopes that the U.S. and Iran will find a diplomatic solution to their standoff," ING said.

"However, the build-up of U.S. military assets in the Middle East means the risk of action remains very real."

In his State of the Union address, Trump said he would prefer a diplomatic resolution to the crisis with Iran, but made clear he would never allow Tehran to obtain a nuclear weapon.

Metals:

Gold

Gold rose back above $5,200 as uncertainty over U.S. trade policy and geopolitical risks in the Middle East continued to support safe-haven demand.

"Gold has stabilised above $5,000/oz, regaining more than half of the losses from its sharp correction earlier this month," MUFG said.

"However, expectations that U.S. interest rates may remain elevated for longer following stronger labour market data and cautious signals from Fed officials, could limit further upside for non-yielding gold."

Gold Chart

Comex gold futures' overall technical setup remained bullish, RHB said, based on the daily chart.

The commodity should resume upside movement toward the $5,500 level, following any consolidation.

Copper

Prices held above $13,000 a metric ton as Chinese buyers returned from the Lunar New Year holiday, boosting import demand.

The Yangshan premium rose to a two-month high, signaling stronger purchasing interest, according to ING.

However, inventories remained elevated on both the Shanghai Futures Exchange and the LME, indicating the global market was still well supplied.

"While stronger Chinese imports should help absorb some excess material, a sustained tightening in spreads will likely require clearer evidence of inventory draws, both in China and on the LME."

EMEA HEADLINES

HSBC Annual Profit Beats Consensus, Lifts Key Targets

HSBC Holdings' annual profit fell but topped market expectations as the lender pressed ahead with efforts to simplify its sprawling operations and strengthen its position in the U.K. and Hong Kong.

Europe's biggest bank by assets has been undergoing a broad organizational revamp under Chief Executive Georges Elhedery, who took over in the fall of 2024. Since then, he has set about cutting costs, streamlining its businesses and accelerating a pivot to Asia, where the lender makes most of its profit, pushing for HSBC become a more "simple, more agile, focused bank."

Diageo Cuts Guidance as New CEO Targets Portfolio Growth

Guinness maker Diageo cut its guidance for the fiscal year on weakness in the U.S., as new chief executive Dave Lewis looks to build a larger portfolio in a bid to revive the U.K. drinks giant's fortunes.

Home to brands like Johnnie Walker and Smirnoff Vodka, Diageo said it expects a 2% to 3% decline in organic net sales, citing weakness in its U.S. business and Chinese white spirits. Organic operating profit growth for the year is expected to be flat to low-single-digits, the company said.

SoftBank-Backed Wayve Raises $1.2 Billion From Microsoft, Nvidia, Automakers

U.K. self-driving technology provider Wayve raised $1.2 billion in a series D investment round, as it seeks to scale the commercial deployment of its driving tech.

The round, led by venture capital firms Eclipse Capital, Balderton Capital and a SoftBank Group fund, pushes Wayve's post-money valuation to $8.6 billion, the car startup said Wednesday.

Leonardo Beats 2025 Guidance as Defense Orders Continue to Rise

Leonardo beat its expectations for 2025, with growing earnings and revenue as defense orders continued to increase.

The Italian aerospace and defense manufacturer, which supplies Boeing and Airbus, said Wednesday that its revenue in 2025 rose 9.8% to 19.50 billion euros ($22.96 billion), beating a forecast of around 18.6 billion euros provided by Leonardo.

GLOBAL NEWS

German Consumer Confidence Weakens as Geopolitical Uncertainty Reigns

Consumer sentiment in Germany edged lower as uncertainty weighed on confidence despite better recent news on the wider economy.

The consumer-climate index, published Wednesday by research groups GfK and the Nuremberg Institute for Market Decisions, declined to minus 24.7 in its forecast for March from minus 24.2 in February. Economists polled by The Wall Street Journal last week had expected an upturn to minus 23.0.

Markets Eye Japan PM's BOJ Picks for Hints on Rate Path

TOKYO-Japan's government has nominated candidates for two positions at the central bank, a move that could be viewed as a chance to influence monetary policy in a more dovish direction.

Sanae Takaichi's administration has nominated two professors that, like the prime minister herself, are considered to be in favor of looser monetary policy, analysts say.

Trump Hails an Economic Turnaround Many Voters Don't See

WASHINGTON-President Trump told a national audience on Tuesday that he had unleashed a new age of economic prosperity. One thing he didn't say: I feel your pain.

At the core of Trump's State of the Union address was a calculation that he can persuade Americans that the economy is in better shape than many think it is. In touting "a turnaround for the ages," the president opted against sending a message to voters that he understands the anxiety that polling shows is widely felt, including among swing voters the GOP needs to preserve its congressional majorities in this fall's midterm elections.

Germany Shows How Difficult It Is to Rewire Relations With China

BERLIN-Long dependent on the U.S. for its security and on China for its growth, Germany is trying to chart its own path. But a pair of high-stakes visits by its new leader to Beijing and Washington over the next week shows the process will be neither easy nor fast.

The trips highlight the dilemma facing many middle powers that are seeking to reduce their dependencies on rival great powers while not exposing their defenses or hurting their economies in the short term.

Write to clare.kinloch@wsj.com

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

February 25, 2026 05:01 ET (10:01 GMT)

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