Date: 19th February 2026.
Markets Walk a Tightrope: Strong Data Meets Rising Geopolitical Risk.
As traders approach the weekend, markets are balancing resilience in US data and corporate earnings against mounting geopolitical uncertainty. While equities have extended gains, underlying caution is becoming more visible, particularly in commodities and safe-haven assets.
Geopolitical Risk Returns to the Forefront
The key macro driver remains escalating tensions between the United States and Iran. Reports suggesting an increased likelihood of military confrontation have lifted oil sharply, with Brent crude holding above $70 and West Texas Intermediate trading above $65.
Any disruption from the Middle East, a region responsible for roughly a third of global oil supply, would have immediate inflation implications. That risk alone is enough to keep traders cautious, particularly ahead of a weekend when headline exposure cannot be managed intraday.
Gold has edged higher, while Bitcoin has slipped, a subtle signal that risk appetite remains selective rather than euphoric.
Labour Market Stability Keeps the Fed Patient
Thursday’s US jobless claims data is the only meaningful release on the calendar. Initial claims are expected at 225K, with continuing claims near 1.86 million. Recent labour market readings have shown gradual stabilisation rather than deterioration, reinforcing the view that the Federal Reserve does not need to rush into rate cuts.
Minutes from the January meeting revealed divisions within the central bank. Some officials remain concerned about persistent inflation, while others are open to easing later in the year. Despite hawkish undertones, market pricing still anticipates two rate cuts by year-end.
Unless jobless claims deviate significantly from expectations, the data is unlikely to shift that pricing meaningfully. For now, policy expectations remain steady, but sensitive to surprises.
Equities Supported by Tech Leadership
US futures are hovering near flat after a solid session in which the S&P 500 and Nasdaq Composite both advanced, led by renewed strength in mega-cap technology.
Nvidia once again played a central role in lifting sentiment, particularly following AI-related partnership developments with Meta Platforms. Given Nvidia’s heavy index weighting, its performance continues to exert disproportionate influence on broader benchmarks.
However, the AI narrative remains double-edged. While it drives index gains, it also fuels volatility in sectors perceived as vulnerable to disruption. Markets have recently shown a tendency toward sharp rotational moves, underscoring how fragile conviction can be beneath the surface.
Global Markets and Diverging Policy Paths
In Asia, indices such as the Nikkei 225 and Kospi posted gains following Wall Street’s strength. In Europe, the FTSE 100 advanced after inflation data reinforced expectations that the Bank of England may move towards rate cuts.
This divergence highlights an important theme for currency traders: monetary cycles are no longer synchronised globally. Relative policy expectations may drive FX volatility more than absolute levels.
The Bigger Picture for Traders
At the moment, markets are not pricing panic, but they are pricing uncertainty.
Strong US data reduces the urgency for rate cuts. Elevated oil prices threaten to reintroduce inflationary pressure. And geopolitical risk adds a layer of unpredictability that can shift sentiment rapidly.
This environment typically produces choppy price action, sector rotation, and headline-driven volatility rather than clean, trending moves.
As we move towards the weekend, traders may find that disciplined positioning and controlled exposure matter more than directional conviction.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HFM Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
HFMarkets
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.