Geopolitical Developments - February 25, 2026 (Morning)

 ## Global Developments Overview Overnight, global markets showed cautious optimism amid mixed geopolitical and economic signals. Asia markets advanced, led by Japan’s Nikkei 225 which gained 2.22%, supported by strong corporate earnings and easing AI-related fears. South Korea also saw gains, boosted by a surprise central bank rate cut to 1%, aimed at supporting a fragile economic recovery. China’s markets were steady, with the Shanghai Composite benefiting from eased homebuying restrictions, signaling government efforts to stabilize the property sector. European equities edged higher, with the STOXX 600 hitting an all-time high, driven by strong earnings from HSBC and other financials. The UK’s FTSE 100 also rose, buoyed by HSBC’s lending targets and a stronger pound. However, inflation concerns linger in Europe, with the ECB’s Vujcic urging vigilance despite recent inflation victories. Overall, risk sentiment is moderately positive heading into the US open, supported by easing AI disruption fears and robust earnings from major tech and financial companies. The US futures market is flat to slightly positive, reflecting cautious optimism ahead of key earnings reports, notably Nvidia. ## Safe Haven & Currency Moves Gold prices edged up modestly, with **$GLD** rising 0.12% to $475.18, reflecting ongoing demand for safe haven assets amid geopolitical uncertainties and tariff jitters. Silver outperformed gold, surging 1.99% to $80.65, suggesting investors are seeking hedges against trade tensions and inflation risks. US Treasury bonds saw slight declines, with the 20+ year Treasury ETF **$TLT** down 0.03% to $89.87, indicating reduced demand for long-duration safe assets as risk appetite improves. The US Dollar ETF **$UUP** slipped 0.11% to $27.08, pressured by softer US inflation data and dovish signals from other central banks. The Japanese yen weakened following dovish nominations for the Bank of Japan board, reversing earlier gains. The Swiss franc remained steady, maintaining its safe haven status amid global uncertainties. Overall, the market is showing a mild risk-on tilt, with investors balancing optimism from earnings against geopolitical and inflation concerns. ## Regional Market Check **Asia:** Japan’s Nikkei 225 rallied 2.22%, supported by strong corporate earnings and a dovish central bank stance. South Korea’s KOSPI also rose, buoyed by a surprise rate cut to 1%, aimed at stimulating growth amid tariff uncertainties. China’s market was stable, with the Shanghai Composite benefiting from eased homebuying rules, signaling government efforts to stabilize the property sector. Asian currencies, including the Australian and New Zealand dollars, strengthened on inflation data and central bank moves. **Europe:** European equities advanced, with the STOXX 600 reaching record highs. HSBC led gains after reporting strong earnings and raising lending targets. The FTSE 100 followed suit, supported by a stronger pound and positive earnings momentum. However, inflation remains a concern, with ECB officials cautioning against complacency. UK inflation expectations fell in January, providing some relief. The European energy sector is under pressure due to softer natural gas prices and regulatory uncertainties. **Emerging Markets:** Emerging markets showed modest gains, led by Brazil’s Bovespa and India’s Nifty 50, supported by positive corporate earnings and easing global trade tensions. Southeast Asian markets were mixed, with Thailand’s central bank cutting rates unexpectedly to support a fragile recovery. Currency moves in emerging markets reflected a cautious but constructive outlook, with selective inflows into equities and bonds. ## What It Means for Today - US markets are expected to open cautiously higher, supported by positive global cues and strong tech earnings momentum, especially from Nvidia and related AI plays. - Technology and semiconductor sectors are poised for gains, while energy and industrials may face pressure due to softer commodity prices and tariff uncertainties. - Defense stocks such as **LMT**, **NOC**, and **RTX** may see volatility amid ongoing geopolitical tensions and Pentagon scrutiny of AI-related vendors. - Energy stocks like **CVX** and **COP** could be pressured by near 1% declines in oil prices (**$USO** at $79.97) despite geopolitical supply concerns. - Key risks include US-Iran negotiations, potential tariff escalations, and AI regulatory developments that could impact market sentiment and sector rotation. - Investors should consider maintaining exposure to safe haven assets like gold and silver, while selectively participating in AI and technology growth themes. --- This briefing synthesizes overnight developments and their market implications to guide trading strategies for the US session.