General Market Analysis – S&P 500, Nasdaq, FTSE 100 | Capital Street FX | 25 Feb 2026
Capital Street FX — Research & Analysis
General Market Analysis
US Stocks Rebound on AI Optimism — Nasdaq Gains Over 1%
U.S. equity markets are posting a strong recovery session on Tuesday, led by technology shares. The Dow Jones is climbing 0.76% to 49,147, the S&P 500 is rising 0.77% to 6,890, and the Nasdaq Composite is outperforming with a 1.04% jump to 22,863. Sentiment is improving sharply after reports are emerging that Meta Platforms is planning to invest billions of dollars in AI infrastructure hardware sourced directly from Advanced Micro Devices — a deal that is being interpreted by markets as further evidence that the structural AI capital expenditure cycle is continuing to accelerate, even amid broader macroeconomic uncertainty.
The US Dollar Index (DXY) is edging 0.19% higher to 97.88, reflecting a modestly firmer Dollar as Treasury yields are moving in a mixed fashion. The 2-year yield is rising 2.3 basis points to 3.461%, reflecting continued expectations that the Federal Reserve is remaining in a holding pattern on rate cuts, while the 10-year yield is dipping slightly to 4.029% — signaling some demand for longer-duration Treasuries on residual safe-haven interest. Trade policy uncertainty is remaining a central theme, with President Trump’s renewed push for 15% tariffs continuing to inject volatility into equity, FX, and commodity markets.
🕐 Session-by-Session Breakdown
Tariff Uncertainty & AI-Driven Rebound
Trade policy uncertainty is remaining the dominant theme, with Trump’s renewed 15% tariff push adding volatility across asset classes. Equity markets are experiencing intraday swings but are recovering on AI optimism. Gold is briefly benefiting from safe-haven demand before easing on Iran de-escalation news. Treasuries are seeing renewed interest mid-session. Regional economic data is taking a back seat to policy and geopolitical developments.
Sentiment-Driven with Multiple Catalysts
Asian markets are facing a complex, sentiment-driven session. China’s steady Loan Prime Rate is providing no surprise, while Japan’s soft growth backdrop and the PM Takaichi–BOJ rate hike controversy are keeping the Yen under pressure. Australian CPI data is a key domestic catalyst for AUD/USD. Trump’s State of the Union speech is shaping early directional bias across the region, particularly for export-sensitive markets.
Modest Gains — Lagarde & Earnings in Focus
European stocks are moving modestly higher on the back of strong corporate earnings, with HSBC being a key highlight driving financials. Investors are closely watching ECB President Lagarde’s remarks for rate guidance, particularly as Eurozone PMI data is signalling uneven recovery. U.S. weekly jobless claims (forecast: 217K) are also due, providing a cross-Atlantic macro read for EUR/USD and European equity direction.
📊 Index Technical Analysis
S&P 500 SPX / US500
The S&P 500 is holding firm as buyers are defending key support — structure is remaining constructive above the 50-day moving average.
The S&P 500 is remaining above its 50-day moving average, preserving a constructive medium-term structure after yesterday’s 0.77% gain to 6,890. Buyers are actively defending the 6,800 support region — a level that is coinciding with the 50-day EMA — and the index is maintaining its broader uptrend despite persistent headwinds from tariff policy uncertainty and a Federal Reserve that is showing no urgency to cut rates. The AI investment narrative is proving to be a powerful catalyst for momentum, with the Meta–AMD deal is reinforcing the view that enterprise technology spending is remaining structurally robust even as the macro environment is creating caution.
⚙ Technical Outlook
The index is remaining above its 50-day moving average, preserving a constructive medium-term structure. Momentum indicators are stabilizing after recent volatility, signalling that the corrective pressure is easing. Immediate resistance is sitting near recent swing highs, and a sustained break above this level could re-open upside continuation. Support is remaining firm around the 6,800 region, with a failure below this level likely inviting a retest of the 50-day EMA near 6,650.📰 Fundamental Outlook
Strong corporate earnings — particularly from mega-cap AI-linked technology — and the structural AI capital expenditure theme are underpinning sentiment. However, trade policy uncertainty and persistent inflation (PCE remaining above the Fed’s 2% target) are capping more aggressive risk-taking. A Fed rate cut before mid-2026 is appearing increasingly unlikely, which is pressuring rate-sensitive sectors while rewarding cash-generative technology companies.Nasdaq 100 NDX / US100
The Nasdaq 100 is extending its rebound on tech strength — renewed bullish momentum is building above short-term moving averages.
The Nasdaq 100 is extending its rebound, outperforming broader indices with a 1.04% gain as technology shares are leading the recovery. The Meta–AMD AI infrastructure investment story is acting as a powerful sector-wide catalyst, lifting semiconductor stocks, cloud computing names, and AI-adjacent software companies broadly. The index is continuing to trade above its short-term moving averages, signaling renewed bullish momentum after a period of elevated volatility driven by tariff uncertainty and AI regulatory concerns.
The RSI is recovering from neutral territory, suggesting that upside traction is improving and that the recent corrective phase is running out of momentum. However, the index is still navigating a complex macro backdrop — tariff policy risks are weighing on hardware companies with significant Asian supply chain exposure, while the Fed’s higher-for-longer stance is creating a discount-rate headwind for high-multiple growth stocks. A move above recent highs would confirm trend continuation and likely trigger algorithmic momentum-buying, while downside support is resting near the 50-day EMA.
⚙ Technical Outlook
The Nasdaq 100 is continuing to trade above short-term moving averages, signaling renewed bullish momentum. RSI is recovering from neutral territory, suggesting improving upside traction. A move above recent highs would confirm trend continuation and potentially accelerate a momentum-driven rally. Downside support is sitting near the 50-day EMA, which is providing a reliable floor during recent pullbacks.📰 Fundamental Outlook
The AI capital expenditure narrative is remaining the key fundamental driver, with the Meta–AMD deal reinforcing the view that technology infrastructure spending is accelerating rather than decelerating. Semiconductor stocks, cloud providers, and AI-adjacent software are all benefiting. Risks to the upside scenario include a tariff escalation targeting tech hardware imports from Asia and any hawkish surprise from the Fed or State of the Union speech.FTSE 100 UKX / UK100
The FTSE 100 is consolidating amid trade uncertainty — price is holding above key MAs but is remaining below recent peaks with momentum flattening.
The FTSE 100 is trading in a consolidation range below recent peaks, with momentum indicators flattening as the index is navigating a complex set of cross-currents. Strong corporate earnings — most notably from HSBC, which is lifting the financials sector — are providing a partial offset to broader trade uncertainty concerns. The index is holding above its key moving averages, keeping the broader trend technically intact, though a lack of decisive directional catalyst is keeping price action contained.
On the negative side, the easing of U.S.–Iran tensions is triggering a correction in crude oil prices, which is weighing on the FTSE’s significant energy sector weighting (BP, Shell). Meanwhile, U.S. tariff policy uncertainty — particularly the risk of further measures targeting UK goods — is creating caution among export-facing industrials and consumer companies. ECB President Lagarde’s remarks and U.S. weekly jobless claims data are both serving as near-term catalysts that could influence the risk appetite feeding into European equities. BOE rate cut expectations are continuing to provide a floor for domestic-oriented names, but global headwinds are preventing a sustained break above resistance.
⚙ Technical Outlook
The FTSE 100 is trading in a consolidation range below recent peaks, with momentum indicators flattening — indicating a lack of near-term directional commitment. The index is holding above its key moving averages, keeping the broader trend technically intact. A breakout above resistance could trigger fresh gains toward new highs, while support is remaining near recent swing lows. Volume is subdued, suggesting the market is waiting for a fresh catalyst before committing to direction.📰 Fundamental Outlook
HSBC’s strong earnings are providing a financials tailwind, but the oil price correction (Iran de-escalation) is weighing on the energy-heavy index. U.S. tariff uncertainty is creating caution among UK exporters. The BOE’s dovish policy trajectory is supportive for rate-sensitive domestic sectors, but global growth concerns are capping upside. Lagarde’s comments and U.S. jobless claims remain the key near-term data catalysts for European equity direction today.🗓 Key Events & Data — Today & Ahead
| Region | Event | Forecast / Detail | Impact |
|---|---|---|---|
| 🇺🇸 US | President Trump — State of the Union Address | Tariff & trade policy signals key | 🔴 Very High |
| 🇪🇺 ECB | ECB President Christine Lagarde Speech | Rate path & disinflation signals | 🔴 High |
| 🇺🇸 US | Weekly Jobless Claims | Forecast: 217K | 🟡 Medium |
| 🇩🇪 EUR | Germany IFO Business Climate | Leading indicator for EU economy | 🟡 Medium |
| 🇦🇺 AUD | Australian CPI Data | Key for RBA rate expectations | 🔴 High (AUD) |
| 🌍 GLOBAL | Tariff & Trade Policy Developments | US–UK, US–EU ongoing negotiations | 🔴 Ongoing |
