U.S. stock futures for the three major indices were all higher in pre-market trading on Thursday, February 26. At the time of writing, Dow Jones futures were up 0.12%, S&P 500 futures gained 0.08%, and Nasdaq futures advanced 0.02%.
Major European indices also traded positively. Germany's DAX index rose 0.46%, Britain's FTSE 100 increased by 0.19%, France's CAC 40 climbed 0.92%, and the Euro Stoxx 50 was up 0.37%.
In commodity markets, oil prices fell significantly. WTI crude dropped 1.90% to $64.18 per barrel, while Brent crude declined 1.36% to $69.73 per barrel.
Market sentiment was influenced by news that a third round of indirect talks between the U.S. and Iran in Geneva has been paused and is scheduled to resume later. Reports confirmed the pause, with Omani officials stating that creative and positive proposals were exchanged, hoping for further progress. A convoy believed to be carrying U.S. diplomats was seen leaving the Omani diplomatic residence, the venue for the talks, contributing to the sharp decline in international oil prices.
The Federal Reserve's annual "severely adverse scenario" for stress testing the financial system, set for 2026, outlines a global severe recession triggered by a sudden drop in risk appetite. This scenario projects a roughly 54% decline in equity markets over the first three quarters, a surge in the VIX index peaking at 72% in the second quarter, and corporate bond spreads widening to 5.7 percentage points. The resulting turmoil is expected to suppress household demand and lead to significant cuts in employment and investment, with a slow recovery for the economy and asset prices.
Hedging costs for the S&P 500 have surged as investors aggressively purchase put options to protect against a potential downward breakout from the index's nearly four-month trading range. However, a growing number of strategists view this pessimism as a contrarian indicator suggesting a potential market reversal upward. The stagnant market sentiment, particularly among retail investors, persists due to massive sell-offs driven by AI tools across sectors, uncertain trade policies, and elevated geopolitical tensions.
The primary market for U.S. corporate bonds is experiencing its most intense competition ever, according to Barclays. The bank's proprietary competition index indicates that the intensity of competition in both high-grade and high-yield bond markets has surpassed levels seen since 2017. High-grade bond market competition was 15% higher in the first half of 2025 compared to 2017, while high-yield market competition was about 30% higher.
**Individual Stock News** NVIDIA (NVDA.US) reported record fourth-fiscal-quarter revenue of $68.1 billion, a 73% year-over-year increase, beating analyst estimates of $65.9 billion. Operating profit grew 81% to $46.1 billion, and net income rose 79% to $39.6 billion. Adjusted EPS was $1.62, surpassing expectations of $1.53. The company also provided better-than-expected guidance for the first quarter of fiscal 2027, forecasting revenue of $78 billion, well above the $72.8 billion consensus. Despite the strong results, its stock rose only 1.07% in pre-market trading as concerns about its sales outlook lingered. Other members of the "Magnificent Seven" mostly traded lower.
Salesforce (CRM.US) saw its shares fall 2.1% due to tepid growth guidance, even as its fourth-quarter revenue of $11.2 billion, up 12% year-over-year, slightly beat expectations. Adjusted EPS of $3.81 significantly exceeded the $3.04 forecast. The company provided optimistic near-term guidance, projecting first-quarter revenue between $11.03 billion and $11.08 billion and adjusted EPS between $3.11 and $3.13, both above analyst expectations.
Baidu (BIDU.US) reported fourth-quarter total revenue of RMB 32.7 billion ($4.68 billion), up 5% quarter-over-quarter, primarily driven by growth in its core AI new businesses. Operating profit was RMB 1.5 billion ($212 million), with an operating margin of 5%. Non-GAAP operating profit was RMB 3.0 billion ($424 million), with a margin of 9%. Net income attributable to Baidu was RMB 1.8 billion ($255 million).
iQiyi (IQ.US) achieved year-over-year and quarter-over-quarter growth in total revenue for the fourth quarter, marking its fourth consecutive year of non-GAAP operating profitability. Full-year 2025 revenue was RMB 27.29 billion.
Snowflake (SNOW.US) provided full-year and first-quarter product revenue guidance that exceeded analyst expectations, benefiting from enterprises migrating workloads to the cloud and increasing AI application investments. However, concerns about traditional software companies' growth momentum in the AI era persist.
C3.ai, Inc. (AI.US) reported third-fiscal-quarter results and fourth-quarter guidance significantly below expectations and announced plans to cut nearly a quarter of its workforce. Q3 revenue fell 46% year-over-year to $53.3 million, missing estimates. The company's Q4 revenue guidance midpoint of $50 million was far below the $77.7 million consensus.
Trip.com Group (TCOM.US) reported 2025 full-year net operating income of RMB 62.4 billion, up 17% year-over-year. Net profit attributable to shareholders surged 95.08% to RMB 33.294 billion.
Stellantis NV (STLA.US) reported a loss for the second half of the year after scaling back its electric vehicle transition plan, leading to a wave of impairments and charges. Adjusted operating loss for the six months to December was €1.38 billion ($1.6 billion), largely attributed to its North American operations.
Microsoft (MSFT.US) is cooperating with an investigation by Japan's Fair Trade Commission regarding potential anti-competitive practices related to its Azure cloud service. The company's Japan president emphasized that all operations are conducted with integrity.
**Key Economic Data and Events Preview** 21:30 Beijing Time: U.S. Initial Jobless Claims for the week ending February 21. 23:00 Beijing Time: Fed Governor Bowman testifies before the U.S. Senate Committee on Banking, Housing, and Urban Affairs. 05:30 Beijing Time (Next Day): Federal Reserve Balance Sheet for the week ending February 25. TBD: New round of U.S.-Iran talks in Geneva.
**Earnings Preview** Friday Pre-Market: Intuit (INTU.US), Dell (DELL.US), MP Materials (MP.US)
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