Market News 19 FEB

Markets in Anticipation of Change: Key Events and Trends

One of the key factors affecting stock markets was the discussion of a possible peaceful resolution to the Russia-Ukraine conflict. A meeting between U.S. and Russian representatives in Saudi Arabia raised hopes among investors. However, Ukrainian officials stated that they would not recognize agreements made without their participation. As a result, markets remained uncertain, awaiting further developments.

Federal Reserve Decisions and Their Economic Impact

Financial markets also reacted to statements from Federal Reserve representatives. Fed Governor Christopher Waller noted that current macroeconomic data does not justify an imminent rate cut. He emphasized that fighting inflation remains a priority and that rate reductions are only possible with significant economic improvement. San Francisco Fed President Mary Daly also stated that monetary policy should remain restrictive, as inflation is declining slower than expected. These statements led to a rise in the 10-year Treasury yield to 4.55%.

Macroeconomic Data

A positive surprise for the market came from the February Empire Manufacturing Index, which jumped from -12.6 to 5.7, significantly exceeding analysts' expectations. Meanwhile, the NAHB Housing Market Confidence Index fell to 42 points, its lowest level in five months, due to high mortgage rates and rising construction costs.

Interest Rate Expectations

Investors closely monitor upcoming Fed decisions. Current data indicates only a 2% probability of a 25-basis-point rate cut at the March 18–19 meeting, suggesting that a policy shift is unlikely in the near term.

Global Stock Markets

Global markets showed mixed performance on Tuesday. The European Euro Stoxx 50 index rose by 0.25%, continuing its upward trend from earlier in the week. Meanwhile, China’s Shanghai Composite declined by 0.93%, while Japan’s Nikkei 225 gained 0.25%.

Trends in the Corporate Sector

Technology stocks were in focus on Tuesday.

Intel (INTC) surged by 16% following reports of potential strategic partnerships with TSMC and Broadcom. Shares of Micron Technology (MU) rose by more than 7%, GlobalFoundries (GFS) by 6%, and Lam Research (LRCX) by 4%. However, pressure on the tech sector came from Meta Platforms (META), which fell by 3%, and Amazon (AMZN), which declined by 1%.

Chinese stocks listed on U.S. exchanges also showed positive momentum. Following a meeting between Chinese President Xi Jinping and top tech company representatives, PDD Holdings (PDD) rose by 3.5%, while Alibaba (BABA) gained 1.74%.

Challenges in the Aviation and Consumer Sectors

Some companies faced difficulties. Delta Airlines (DAL) shares fell by 1.61% after an incident involving an overturned aircraft in Toronto. Medtronic (MDT) also faced a 7% drop due to weak quarterly earnings. Southwest Airlines (LUV) declined by 1% following announcements of job cuts aimed at reducing expenses.

In the consumer sector, Conagra Brands (CAG) shares dropped by 5% after management revised its revenue forecast for fiscal 2025.

Conclusions and Outlook

Markets remain uncertain, balancing between macroeconomic data, Federal Reserve decisions, and geopolitical risks. In the coming weeks, investors will closely analyze the FOMC meeting minutes to assess the future direction of monetary policy. The tech sector continues to show both positive drivers and risks, while overall investor sentiment suggests a willingness to take higher risks, which may sustain stock markets at elevated levels.