A series of statements helped boost global financial markets, restoring some confidence and reducing risk aversion. President Donald Trump told the press that the war with Iran could be nearing its end, although he did not believe the conflict would end this week, and that the U.S. military operation was advancing much faster than initially expected. Iran, for its part, claims it is ready to “expand the war,” prompting Trump to threaten that the United States would strike Iran “20 times harder.” As a result, stock markets resumed gains, while oil prices and the dollar index moved lower.

Our take

The abrupt swings in asset prices indicate how sensitive markets have become to headlines regarding the conflict in the Middle East. What we are seeing now is more of a relief rebound after an episode of extreme risk aversion rather than a true return to a full risk-on environment. Trump’s comments have helped ease fears of a prolonged supply crisis, but we believe volatility will remain elevated.

The index measuring optimism among U.S. small businesses, compiled by the National Federation of Independent Business, declined in February to 98.80 from 99.30 in January, also below the consensus expectation of 99.7. February’s reading is the lowest level reached by this indicator in the past four months. It is also worth noting that the average reading for this index over the 1975–2026 period is 98.00, meaning February’s figure remains slightly above that historical average.

Our take

Although optimism declined slightly in February, small businesses reported greater confidence looking ahead to the coming months. In this regard, they highlighted strong sales and rising profits, making February a more positive month for many business owners. Nevertheless, competition from large corporations continues to put pressure on traditional businesses in the current economic environment.

Japan’s economy grew more than initially estimated in the fourth quarter of 2025, supported by stronger business investment and private spending. GDP expanded 0.3% in the final quarter of the year, two tenths higher than the initial estimate. In particular, business investment rose 1.3%, far above the previously estimated 0.2%.

Our take

The data show a certain resilience in Japan’s economy, a trend that could give the Bank of Japan more room to continue raising interest rates. The central bank has indicated that rates will rise if inflation and growth increase in line with its forecasts.

Mexico’s Ministry of Economy presented the results of public consultations for the review of the USMCA. The findings showed that 78.5% of respondents believe the agreement has had a positive or very positive impact. However, the most frequent concerns highlighted were: unilateral trade measures, unfair competition from third countries, regulatory barriers, and challenges related to infrastructure, logistics, and border crossings.

Our take

The message from the consultations is quite clear: the USMCA itself is not the problem; rather, the risk lies in unilateral decisions by any of the three parties that could undermine the agreement’s advantages. This support for the trilateral treaty represents an important lever in negotiations with the U.S. president during the treaty review, particularly as the initial objective is to reduce tariffs on steel and aluminum before the formal review begins in July.

Markets and Stocks

European equities showed a notable recovery, supported by the decline in oil prices from Monday’s highs and expectations that the conflict will not escalate for a prolonged period. In Asia, markets posted a stronger rebound, with Japan and South Korea leading the gains.

In commodities, oil prices posted significant declines, trading below 90 dollars per barrel, while gold and silver rose 1.1% and 2.2%, respectively, benefiting from a slight weakening of the dollar.

Corporate

Taiwan Semiconductor’s sales increased 30% in the first two months of the year, driven by strong demand for artificial intelligence infrastructure.

Hewlett Packard projected quarterly revenue above market expectations, supported by solid demand for infrastructure linked to artificial intelligence, particularly in its networking business. The company also raised its annual earnings guidance and highlighted a backlog of nearly 5 billion dollars in AI servers, although it warned that shortages of memory chips could continue to pressure the supply chain.

Volkswagen announced that it will seek further cost reductions in development, procurement, and production to confront increasingly intense competition, particularly from Chinese manufacturers. The company expects its operating margin could fall to around 4% in 2026, affected by tariffs, investments in electric vehicles, and weak demand in Europe. As part of its strategy, Volkswagen reduced its investment plan to 160 billion euros and maintains its goal of raising its operating margin to 8–10% by 2030.

The to-do list

Quote of the day

“Success is the sum of small efforts repeated day after day.”