Markets opened under pressure as investors reassessed technology sector valuations and digested a string of geopolitical developments. The risk-off dynamic, already present earlier in the week, intensified after Nvidia - often viewed as the poster child of the artificial intelligence surge - posted results that many investors judged insufficient for a sector priced for near-perfection.
Against that backdrop, classic safe-haven assets gained ground. The Japanese yen strengthened and U.S. Treasury prices rose, while crude oil edged up modestly.
Diplomatic activity around Iran provided a mixed backdrop. In the wake of a U.S. President Donald Trump threat of strikes against Iran, an Omani official serving as mediator for the nuclear discussions between Washington and Tehran delivered an optimistic account of the latest round of talks, but the two sides remain widely separated on key issues.
Other regional tensions added to market unease. Pakistan said its patience with the Taliban administration in Afghanistan had run out, reporting overnight bombings of Taliban government targets and declarations of "open war." Separately, China’s military accused the Philippines of "disrupting" regional peace and stability by organising joint patrols with countries from outside the area.
In an unusual domestic security episode, the U.S. military used laser systems to shoot down a drone over Texas that had been deployed by the U.S. government, highlighting operational developments in counter-drone capabilities.
Political developments in the U.K. also weighed on sentiment. British Prime Minister Keir Starmer suffered a defeat in an electoral contest in Greater Manchester, an area his Labour Party had long dominated.
Market indicators pointed to a mixed start in European trading:
- Euro Stoxx 50 futures were up 0.03% at 6,172
- German DAX futures were flat at 25,314
- FTSE futures were up 0.21% at 10,856.5
- U.S. S&P 500 e-mini futures were down 0.24% at 6,903.3
Key scheduled releases and events that could move markets included several monthly and quarterly data points and a central bank speech. They are likely to draw investor attention through the day:
- United States - Producer Price Index (PPI) for January; Chicago Purchasing Managers Index (PMI) for February
- France - Consumer spending for January; producer prices for January; Consumer Price Index (CPI) for February; fourth-quarter GDP
- Germany - Unemployment for February; import prices for January; CPI for February
- Bank of England chief economist Huw Pill is scheduled to speak
- Canada - Fourth-quarter GDP
Investment tool note
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This combination of stretched tech valuations and growing geopolitical friction has produced a cautious trading environment in which safe havens outperformed and equity indices showed mixed signals.