A look at the day ahead in European and global markets

By Rocky Swift, Chief Correspondent, Japan Markets

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Geopolitical tensions and signs of cooling in the red-hot tech sector remain on investors' minds, taming price action on stocks, currencies, and commodities.

Asian shares crept higher, following slight gains on Wall Street, as concerns lingered about valuations linked to artificial intelligence and AI's potential impact on the broader economy. Many markets in the region remained closed for Lunar New Year holidays.

Japan was a standout, with the Nikkei jumping more than 1% on expectations the nation's tech firms will benefit from $36 billion in U.S. projects announced by President Donald Trump's administration that are to be funded by Tokyo.

Iran's Foreign Minister Abbas Araghchi addresses a special session of the Conference on Disarmament at the United Nations, aside of U.S.-Iran talks in Geneva, Switzerland, February 17, 2026. REUTERS/Pierre Albouy

Meanwhile, Geneva is playing host to negotiations aimed at cooling hotspots in the Middle East and Europe.

Iranian Foreign Minister Abbas Araqchi said Iran and the U.S. reached an understanding on "guiding principles" in resolving their nuclear dispute.

Representatives from Ukraine and Russia concluded the first of two days of U.S.-mediated peace talks as well. 

Inflation remains the watchword for central bank policy. The kiwi dollar slumped nearly 0.9% after the Reserve Bank of New Zealand held rates steady and said expectations of cooling inflation would allow it to remain accommodative.

Chicago Fed President Austan Goolsbee said on Tuesday that there could be "several more" cuts this year, depending on inflation. Investors will get further insight into the Federal Reserve's thinking with the release of the minutes from its January meeting later on Wednesday.

British inflation data will be closely watched after a report on Tuesday showed unemployment rose to a five-year high, boosting the case for rate cuts by the Bank of England and triggering a slide in the pound.

The UK consumer price index is expected to show growth slowed to 3% year-on-year in January from 3.4% in December. France is also due to report CPI figures.

Stock futures pointed to slight gains at the open in Europe. The Euro Stoxx 50 futures index was up 0.07% at 6,039, German DAX futures added 0.06% at 25,074, and FTSE futures edged up 0.14% at 10,529.

Graphics are produced by Reuters.

People pray at a Chinese temple on the first day of the Lunar New Year, in Bangkok, Thailand, February 17, 2026. REUTERS/Chalinee Thirasupa.