MPC Morning Call 18th February 2026 – Stocks mixed as markets searches for direction
Stocks closed mixed overnight as investors searched for direction after a US long-weekend.
Watch on YouTube 18th February 2026 – Stocks mixed as markets searches for direction Stocks closed mixed overnight as investors searched for direction after a US long-weekend. Investor anxiety around artificial intelligence remained the dominant market theme, with early weakness in AI‑linked names, particularly in software, dragging major indices lower before a rebound in leaders like Nvidia, Broadcom and Apple helped restore gains. Analysts highlighted an ongoing sector rotation, as strength in banks and financials offset profit‑taking in key retailers such as Walmart and Home Depot, while broader worries persist about whether massive AI infrastructure spending will ultimately generate adequate returns for mega‑cap tech. Deutsche Bank strategists framed the shift in sentiment as a move from a “magical vision” of AI to a more practical implementation phase, where markets are increasingly focused on which industries face disruption, automation and potential obsolescence. Macro‑sensitive events are also in focus, with investors awaiting the Federal Reserve’s January meeting minutes, alongside industrial production, durable goods, trade balance, PCE inflation and Q4 GDP data, all of which could refine expectations for the interest‑rate path after a mildly cooler CPI print. Lower U.S. yields have already taken the 10‑year Treasury to around two‑month lows near 4.03%, providing a tailwind for rate‑sensitive areas such as financials and real estate, even as tariff uncertainty surfaces more frequently on earnings calls, including from Medtronic. Oil prices eased after reports of progress in U.S.–Iran nuclear talks, with Brent and WTI both slipping despite ongoing military tensions in the Middle East and continued threats of U.S. action if a deal is not reached. On the corporate front, attention is turning to earnings from Palo Alto Networks, DoorDash, Walmart and Wayfair, with Palo Alto’s results expected to offer fresh insight into how cybersecurity players are competing amid the latest wave of AI models and following its raised guidance and $3.35 billion Chronosphere acquisition to bolster its AI‑driven Cortex platform. Broader stock‑specific moves underscored a cautious tone: General Mills slid after cutting its profit outlook on signs of consumer stress, Danaher’s shares fell on skepticism over its nearly $10 billion Masimo deal, and media names remained in focus as Warner Bros. Discovery moved toward a vote on its proposed Netflix merger while Paramount rallied on takeover speculation. AI‑related market dynamics remain highly sensitive, with Schwab characterizing the current phase as a “cascade” in which investors are no longer just identifying beneficiaries of AI but also the likely casualties, as seen in a roughly 30% drawdown in the iShares Software ETF and close tracking of the S&P 500 around its 100‑day moving average. This nervousness is illustrated by Amazon’s roughly 18% slide since early February amid concern that its planned $200 billion in largely AI‑driven capex could pressure free cash flow, despite management’s confidence in long‑term returns. All eyes now turn to Nvidia’s February 25 earnings, widely viewed as a pivotal test of the AI infrastructure bull thesis and a potential inflection point for sentiment across the broader technology complex. Commodities, Energy & FX ASX Overnight: SPI 8895 (-0.87%) The Day Ahead: The ASX will be dominated by earnings again today. Corporate news NAB earnings – Click here to read summary STO Earnings - Click here to read summary Other Notable earnings: Mirvac has reported a 5 per cent rise in half year operating profit to $248 million, while earnings before interest and taxes jumped 10 per cent to $398 million. The property giant also stuck with its earnings guidance for the full year. Suncorp’s first-half cash earnings dropped to $270 million, about one-third of the $828 million a year earlier which was in line with expectations. That’s after the insurer faced nine large natural hazards that led to more than 71,000 claims at a net cost of $1.3 billion. Iluka Resources has swung to a $288 million net loss for 2025 from a $231 million profit a year earlier, after weaker mineral sands conditions and $566 million in impairments and write-downs weighed on the result. Netwealth has swung to a half year net loss of $2.2 million as it counts the cost of settling with regulators and refunding more than $100 million to victims of the First Guardian Master Fund collapse. It reported a profit of $57.6 million profit a year earlier.
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