Recap | 18 February 2026
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US-Iran talks yield further dialogue but specter of conflict looms
Ukraine and Russia negotiations stall over territory, US to monitor any peace
Federal Reserve meeting minutes suggest extended rates pause
Chipmakers lift stocks as oil rallies on Middle East concerns
US data surprises point to resilient production and capital investment
ECB succession plans eyed amid Lagarde reports (FT)
US discusses arms for Taiwan with China, repeats nuclear testing allegations
UN Security Council meets on Gaza ahead of Board of Peace
EU prepares 'Made in Europe' law to bolster strategic industries
Social media in focus amid trial, youth restrictions, and content bans
India hosts AI summit, technology firms look to data center expansion
US plans to withdraw forces from Syria (WSJ)
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Headlines
US-Iran talks yield further dialogue but specter of conflict looms
Hosted by Oman in Geneva, mediation between the US and Iran brought concrete steps toward further dialogue but did not produce substantive agreement. The parties remain at odds over whether Iran may continue its nuclear enrichment program; ballistic missile capabilities were not in scope.
Although both countries are expected to exchange draft language for an agreement that would also relax economic sanctions on Iran, military preparations and bellicose statements from leaders pointed to mounting risk of conflict.
On Tuesday, Iran briefly closed the Strait of Hormuz - a pivotal shipping lane for oil - in a step it has not taken in decades. The US continued to amass naval and air power in the region for a possible intervention.
Sources:
Iran says it temporarily closed the Strait of Hormuz as it held more indirect talks with the US (AP; 2/17)
What to know about the Strait of Hormuz, which Iran says it temporarily closed for a military drill (AP; 2/17)
Iran foreign minister says progress made in nuclear talks with US in Geneva (Reuters; 2/17)
Iran expected to make written proposal for resolving standoff with US, senior US official says (Reuters)
US, Iran Hail Progress in Nuclear Talks After Trump Threats (Bloomberg; 2/17)
Why US-Iran Tensions Raise Concern Over the Strait of Hormuz (Bloomberg)
U.S. Gathers the Most Air Power in the Mideast Since the 2003 Iraq Invasion (WSJ)
Iran is Getting Ready for War With the U.S. (WSJ)
Ukraine and Russia negotiations stall over territory, US to monitor any peace
Meeting with US envoys in Geneva, Ukrainian and Russian delegations made little progress on territorial disputes that have become the principle impediment to a negotiated peace. Ukraine has rebuffed Russia's demands to cede the entirety of Donetsk as well as control of the Zaporizhzhia nuclear power plant.
The participants reportedly made progress on a framework for US monitoring of any peace accord. The US and Ukrainian delegations also met with representatives from Europe.
Sources:
Envoys signal no break through on bridging Russia and Ukraine's political and military differences (AP)
Ukraine, Russia hold peace talks in Geneva as Trump puts pressure on Kyiv (Reuters; 2/17)
US senators in Ukraine call for pressure on Russia, not just talks (Reuters)
Zelenskiy Says Russia Dragging Out Negotiations as Talks End (Bloomberg)
Federal Reserve meeting minutes suggest extended rates pause
The latest minutes for the January 27-28 FOMC revealed that Federal Reserve officials are not convinced that a near-term rate cut is warranted. With diminished risks to labor markets that have appeared to stabilize, inflation and the Fed's commitment to addressing it figured prominently:
"Most participants, however, cautioned that progress toward the Committee's 2 percent objective might be slower and more uneven than generally expected and judged that the risk of inflation running persistently above the Committee's objective was meaningful."
Citing resilient consumer spending and an anticipated decline in the unemployment rate, the minutes flagged diverging views on the appropriate path for policy in the near term. "Several" Fed officials believed cuts were likely later this year as others envisioned an extended pause. "Several" also would have supported flexible statement language allowing for either a cut or a hike, which would have represented a material departure from its easing bias.
Note that the Fed made clear it had received requests from the Treasury for dollar-yen prices (so-called "rate checks"), which arrested yen weakness last month. The minutes also highlighted risks in the Treasury market due to high leverage, particularly in relative value trading dominated by hedge funds.
Comment:
Overall, the Fed appears less worried about labor markets but has acknowledged uncertainty in its outlook. With inflation above-target and tariff pass-through yet to fully materialize, the Fed needs to see more inflation data to be comfortable that price growth is slowing. The minutes strongly suggest that the Committee is pushing back on the idea that further easing is guaranteed, even if it appears probable later this year.
Source:
See also:
Fed minutes: Lower inflation needed before many officials will support rate cuts (AP)
Fed minutes show officials grappling with policy split, impact of AI on economy (Reuters)
Fed Reveals Surprise Shift as Several Officials Ponder Hike (Bloomberg)
Fed Minutes Reveal Little Appetite for Rate Cuts (WSJ)
Markets & Economies
Chipmakers lift stocks as oil rallies on Middle East concerns
Chip manufacturers continued to outperform other sectors as US stocks followed a European rally. Encouraging US data releases contributed to dollar strength while Middle East concerns saw oil vault higher.
Sources:
Nvidia leads the US stock market higher (AP)
Oil settles up 4% on Iran-US tensions, Russia-Ukraine talks end without breakthrough (Reuters)
Wall Street ends higher, lifted by Nvidia and other AI stocks (Reuters)
Stocks Get Tech Boost Amid Strong Economic Reports: Markets Wrap (Bloomberg)
Oil Holds Biggest Jump Since October on Iran Conflict Concerns (Bloomberg)
Tech Stocks Regain Their Footing, Lift U.S. Market for a Second Straight Day (WSJ)
US data surprises point to resilient production and capital investment
Technology-related spending lifted core capital goods orders late last year as industrial production accelerated meaningfully in January. Housing starts climbed with multi-family builds outpacing growth in single-family homes.
Sources:
AI boom underpinning US business spending on equipment; housing market still weak (Reuters)
US Industrial Production Increases by Most in Nearly a Year (Bloomberg)
US Core Capital Goods Orders Exceeded Forecast in December (Bloomberg)
US Housing Starts Rise to Five-Month High in Broad Increase (Bloomberg)
Industrial Production Increased in January (WSJ)
U.S. Housing Starts Rose in November, December (WSJ)
ECB succession plans eyed amid Lagarde reports (FT)
The FT reported that ECB President Lagarde may step down from her post a year early in 2027, prior to presidential elections in France. Her plans have not been confirmed.
Sources:
Lagarde's possible early ECB exit leaves investors pondering replacements (Reuters)
Early Lagarde Exit Set to Narrow Field in Race to Lead ECB (Bloomberg)
ECB is Putting Independence at Risk With Lagarde Exit Maneuvers (Bloomberg)
Around the World
US discusses arms for Taiwan with China, repeats nuclear testing allegations
Breaking with precedent, President Trump spoke with China's President Xi regarding US arms sales to Taiwan - a major point of contention. The administration has attempted to walk a fine line ahead of April's summit, which may imperil another arms deal according to the Wall Street Journal.
In contrast, the US buttressed missile deterrents in the Philippines and cited "illegal, coercive, aggressive and deceptive activities" in the South China Sea. A State Department official also repeated US allegations that China conducted low-yield nuclear weapons testing in 2020, which China has denied.
Sources:
Why Trump's comment on discussing Taiwan arms sales with China has raised concerns (AP)
US plans to deploy more missile launchers to the Philippines despite China's alarm (AP; 2/17)
US reveals new details of alleged Chinese nuclear test (Reuters; 2/17)
U.S. Hardens Allegation That China Conducted a Secret Nuclear Test (WSJ; 2/17)
U.S. Plans to Deploy More Missile Systems in the Philippines, Challenging China (WSJ; 2/17)
Exclusive: U.S. Arms Sale to Taiwan in Limbo Amid Pressure Campaign From China (WSJ)
UN Security Council meets on Gaza ahead of Board of Peace
The UN Security Council convened on Wednesday to discuss Gaza ahead of the inaugural meeting of President Trump's Board of Peace. Council members argued for a permanent ceasefire, disarmament, and the facilitation of aid. The Board of Peace is expected to discuss those issues along with the creation of the international stabilization force.
Sources:
Trump gathers members of Board of Peace for first meeting, with some US allies wary of new body (AP)
UN Security Council holds high-level meeting on Gaza before Trump's Board of Peace convenes (AP)
Trump to preside over first meeting of Board of Peace with many Gaza questions unresolved (Reuters)
EU prepares 'Made in Europe' law to bolster strategic industries
According to Reuters, the EU will present its "Industrial Accelerator Act" next Thursday (Feb. 26), which will prioritize domestic suppliers for public purchases in certain sectors.
Comment:
A fractured global order and the resurgence of protectionism has led countries to seek alternative trading partners and champion local industry.
Sources:
What is in the EU's draft 'made in Europe' law? (Reuters)
UK Seeks EU Allies to Counter France's 'Made in Europe' Push (Bloomberg; 2/17)
See also:
Germany will seek strategic partnerships with China amid US tariffs, Merz says (Reuters)
Odds & Ends
Social media in focus amid trial, youth restrictions, and content bans
An ongoing trial concerning social media's propensity for addiction and deleterious mental health effects dovetailed with a growing chorus of global leaders calling for youth bans.
Digital sovereignty, content restrictions, and investigations into major technology companies have become a geopolitical flashpoint.
Sources:
Zuckerberg testifies at trial accusing social media firms of addicting kids to their platforms (AP)
Meta's Zuckerberg denies at LA trial that Instagram targets kids (Reuters)
Germany's Merz joins calls for social media limits for children (Reuters)
Exclusive: US plans online portal to bypass content bans in Europe and elsewhere (Reuters)
Merz Risks Spat With Trump Over Social-Media Ban for Minors (Bloomberg)
Macron Blasts Social Media's Free Speech Defense as 'Bullsh*t' (Bloomberg)
Mark Zuckerberg Grilled on Usage Goals and Underage Users at California Trial (WSJ)
From Paris to New Delhi, the Push to Ban Teens From Social Media is Going Global (WSJ)
India hosts AI summit, technology firms look to data center expansion
Industry leaders gathered in New Delhi for the India AI Impact Summit as technology companies look to invest in data center capacity in South Asia.
Sources:
India eyes $200B in data center investments as it ramps up its AI hub ambitions (AP; 2/16)
Modi pitches India as global artificial intelligence hub at AI summit (AP)
See also:
France's Macron holds bilateral talks with India's Modi to boost economic and strategic ties (AP; 2/17)
US plans to withdraw forces from Syria (WSJ)
According to the Wall Street Journal and corroborated by Bloomberg, the US intends to withdraw the majority of its military personnel in Syria in the wake of President Ahmed al-Sharaa's consolidation of control.
Sources:
US Pulls Forces From Syria as New Government Exerts Control (Bloomberg)
Exclusive: U.S. Is Withdrawing All Forces From Syria, Officials Say (WSJ)
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