Key Points

• U.S. Equities Advance: Major indexes gained as investors assessed Fed minutes and awaited PCE inflation data.
• Fed Policy Split: Officials remain divided on rate cuts, with some even acknowledging potential hike risks.
• Airbus Delivery Target: 870 aircraft goal highlights production constraints amid tightening Boeing rivalry.
• Meta Faces Legal Scrutiny: Zuckerberg testimony underscores mounting regulatory pressure on social media platforms.

February Economic Calendar

Feb 20 — U.S. Initial Jobless Claims: Early indicator of labor market resilience.

Feb 20 — Pending Home Sales (U.S.): Signals housing market momentum amid rate uncertainty.

Feb 21 — U.S. PCE Inflation (YoY/Monthly): Fed’s preferred inflation gauge; pivotal for rate expectations.

Feb 21 — Eurozone PMI Flash Estimates: Measures manufacturing and services momentum.

Feb 24 — Germany Ifo Business Climate: Insight into Europe’s largest economy’s corporate confidence.

Feb 24 — U.S. Treasury Auction (2-Year): Reflects demand for short-duration debt and rate expectations.

U.S. Stocks Rise as Investors Weigh Fed Minutes and Earnings

U.S. equity futures were little changed after the major averages posted gains, with the Dow up 129 points (0.3%), the S&P 500 advancing nearly 0.6%, and the Nasdaq rising 0.8%. Gains were driven by strength in mega-cap technology, financials, and energy shares, while oil prices jumped more than 4% amid geopolitical tensions involving Iran.

Investors digested January Federal Reserve minutes showing policymakers divided on the path forward for rates, with some favoring a pause in cuts and others even floating potential hikes if inflation remains elevated. Markets now turn to Walmart earnings and Friday’s PCE inflation report for further direction.

Fed Officials Signal Policy Uncertainty as Inflation Risks Linger

Minutes from the Federal Reserve’s January meeting revealed a split among policymakers over whether additional rate cuts are appropriate. While several participants said further easing could resume later this year if inflation declines, others argued rates should remain steady until clearer disinflation progress is evident, and some even suggested hikes could be warranted if price pressures persist.

The benchmark rate remains in a 3.5%–3.75% range following last year’s cumulative 75-basis-point cuts. Inflation remains near 3% on the Fed’s preferred measure, and futures markets currently price the next possible rate cut around mid-year.

Airbus Targets 870 Deliveries in 2026 as Boeing Rivalry Intensifies

Airbus set a target of 870 aircraft deliveries in 2026, slightly below market expectations, underscoring ongoing production and supply-chain constraints as competition with Boeing tightens. The guidance signals cautious optimism in commercial aviation demand while acknowledging operational bottlenecks that have weighed on global aerospace manufacturers.

Investors are closely monitoring execution risk, production ramp-ups, and margin recovery as airlines continue replenishing fleets amid sustained travel demand.

Zuckerberg Testifies in Landmark Social Media Safety Trial

Meta CEO Mark Zuckerberg testified in a Los Angeles courtroom that he reached out to Apple CEO Tim Cook regarding teen wellbeing, as part of a broader defense in a high-profile social media safety trial. The case, described by experts as the industry’s “Big Tobacco” moment, centers on allegations that social media platforms knowingly designed addictive features harmful to minors.

Zuckerberg defended Meta’s policies, emphasized internal debate over safety features, and argued that causation between platform use and mental health harm remains unproven. The trial adds regulatory and reputational risk to the sector.

Conclusion

Markets are navigating a complex intersection of monetary policy uncertainty, corporate earnings signals, and sector-specific regulatory developments. The Federal Reserve’s divided stance reinforces a data-dependent approach, with inflation progress critical to shaping rate expectations.

Aerospace manufacturers face operational constraints even as demand remains resilient, while social media companies contend with heightened legal scrutiny that may influence future compliance and business models. Together, these developments highlight a market environment characterized by selective strength, policy sensitivity, and increasing scrutiny of platform-driven growth sectors.

Investment Insights

Policy Uncertainty = Tactical Positioning: Fed division suggests volatility around inflation data; maintain flexibility in rate-sensitive sectors.

Aerospace Execution Matters: Airbus delivery targets highlight supply-chain risks; focus on operational visibility and backlog strength.

Tech Legal Risk Premium: Ongoing social media trials may compress valuation multiples in platform-driven models.

Energy & Geopolitics Watch: Oil price volatility linked to geopolitical tensions may influence inflation expectations and sector rotation.