Market snapshot: gloom in the US and economic concerns over here
Wall Street's return from a public holiday might not be the positive event investors would prefer. ii's head of markets looks ahead to the resumption of US trading and latest UK data.
17th February 2026 08:21
by Richard Hunter from interactive investor
Trading will resume today in the US after Presidents’ Day, with early futures indicating declines of up to 1% for the main indices.
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AI concerns remain front and centre, as investors continue to assess the direct and indirect impacts of a rapidly changing backdrop. While the weakness in the S&P500 and Nasdaq this year has led to cheaper valuations which could lead to some of the hardest hit stocks prone to bargain hunting, the overarching concern has not gone away.
In the meantime, as the week unfolds, updates from Walmart Inc (NASDAQ:WMT) and Deere & Co (NYSE:DE) will provide some indication of the current state of the nation, in addition to which Federal Reserve minutes and GDP data on Friday will provide further colour.
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Most Asian markets are also closed for the Lunar New Year holiday with the notable exception of Japan, where the Nikkei 225 drifted once more after a lacklustre start to the week. Weak economic data on Monday weighed on sentiment, while tech giant SoftBank fell by more than 6% adding to the downward pressure.
It is unclear whether the new administration will follow through on the expected tax cuts and increase in government spending to shore up the economy, despite which the main index is still ahead by more than 9% in the year so far.
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In the UK, latest data from the Office for National Statistics (ONS) shows Britain's economy remains in a difficult spot, with unemployment uncomfortably high at a five-year peak of 5.2%. Signs of a deteriorating jobs market add to concerns about low growth and productivity. One bright spot is slowing wage growth, which helps the likelihood that inflation appears to be stabilising, which could be confirmed in the latest release tomorrow. This in turn could open the door to an interest rate cut from the Bank of England in its next meeting in reflection of an economy in need of stimulus.
Of course, any such economic concerns have a limited effect on the primary index, which derives the majority of earnings from overseas. Indeed, the FTSE100 hit a record closing high yesterday for the tenth time this year and further changes are afoot which could bolster its appeal as an investment destination.
The London Stock Exchange recently announced plans which could make it easier for international companies to join the FTSE100 by reducing the number of shares required to be publicly traded. Early reports suggested that this could entice the likes of Visma, a Norwegian software company, and Uzbekistan state-owned gold producer Navoi Mining to the index, which would further consolidate the appeal of the primary index as a quasi-global tracker.
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In the meantime, the index remains at the core of global investor attention, with the opening rise adding to the record closing high and taking the FTSE100 to a gain of 5.8% in the year so far.
Quite apart from the fact that valuations remain undemanding, as evidenced by approaches for the likes of Beazley (LSE:BEZ) and Schroders (LSE:SDR), the more recent appeal of the defence, resource and bank sectors is largely intact. A dip in the gold price weighed on the likes of Fresnillo (LSE:FRES) and Endeavour Mining (LSE:EDV) at the open, but this was more than offset by further recovery in data stocks such as Experian (LSE:EXPN) and RELX (LSE:REL) as well as the banks, with pleasing numbers and a share buyback programme also lifting InterContinental Hotels Group (LSE:IHG). Housebuilders like Taylor Wimpey (LSE:TW.) were also in demand as the latest data strengthened the case for a further interest rate cut.
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