FOMC Split Lifted Yields; Stocks Rose

FOMC minutes impact: yields and dollar rise, US and European equities close higher

Key Points

01FOMC minutes showed policy divisions and upside inflation risks, which pushed Treasury yields higher and supported the dollar while weighing on rate-sensitive assets.
02UK CPI slowed to 3.0% y/y, which increased odds of earlier BoE easing and prompted sterling weakness and lower gilt yields.
03RBNZ held the OCR at 2.25% and signaled policy likely to remain accommodative, keeping NZD and local rate pricing in focus.
04Despite the hawkish read, US and European equities closed higher as markets digested minutes; energy led sector gains while utilities and real estate lagged.

Global Market Summary

US stocks closed higher as markets digested FOMC minutes that revealed divisions over the policy path; the S&P 500 (SPX) rose 0.68%, the Nasdaq (^IXIC) gained 0.93% and the Dow (DJIA) added 0.37%. European benchmarks advanced with the CAC 40 (FRA40) up 0.81%, the FTSE 100 (UKX) up 1.23% and the DAX (DAX) up 1.12% after UK CPI slowed to 3.0% y/y, which increased odds of earlier BoE easing. Asia was led by Japan's Nikkei (NKY), which rose 1.02% as markets traded through the day's macro releases.

Top Movers

Energy led sector gains with XLE (+2.06%) the top-performing ETF, while utilities (XLU -1.65%) and real estate (VNQ -1.10%) lagged. Notable individual gainers included IBRX (+42.28%), EMAT (+25.29%) and GLBE (+18.45%). Leading decliners were ACLS (-17.16%), COCO (-13.50%) and DINO (-10.99%).

Macro highlights

FOMC minutes showed divisions among policymakers and highlighted upside inflation risks, a tone markets read as hawkish that pushed Treasury yields higher and supported the dollar while weighing on rate-sensitive assets. UK CPI slowed to 3.0% year-on-year in January, increasing odds of earlier Bank of England easing and prompting sterling weakness and lower gilt yields. The Reserve Bank of New Zealand held the OCR at 2.25% and signaled policy likely to remain accommodative, keeping NZD and local rate pricing under focus.

News that moved markets

Analog Devices (ADI) reported fiscal Q1 revenue of $3.16 billion, raised the quarterly dividend to $1.10 and highlighted strong free cash flow, a combination that supported ADI shares and influenced semiconductor supplier re-rating. Garmin (GRMN) posted record Q4 and FY2025 results, raised its annual dividend and authorized a $500 million share repurchase, driving positive investor reaction to stronger margins and cash generation. SM Energy (SM) agreed to sell South Texas assets for $950 million to Caturus, a cash transaction management said will accelerate deleveraging and alter capital-allocation optionality. Reddy Ice completed the acquisition of Arctic Glacier, and Prenetics completed the $70 million sale of Insighta to Tencent. Several announced transactions were reported as well, including Flow Control Management's acquisition of Kingston Valve Co and TitanX's purchase of FrontSpin.

Upcoming session watchlist

01Japan Inflation Rate YoY (JAN) — forecast 1.9% vs 2.1% prior, Feb 19, 11:30 PM | Signals near-term inflation trend and price pressure trajectory.
02US Retail Inventories Ex Autos MoM Adv (DEC) — forecast 0.1% vs 0.2% prior, Feb 19, 01:30 PM | Indicates inventory balance that affects GDP tracking and supply-demand dynamics.
03US Pending Home Sales YoY (JAN) — vs -3.0% prior, Feb 19, 03:00 PM | Gauges housing demand momentum and pipeline for existing home sales.

Key Takeaways

01US stocks closed higher, with the S&P 500, Nasdaq and Dow all posting gains as markets digested the FOMC minutes.
02European benchmarks advanced after UK CPI slowed, and Japan's Nikkei led Asian gains as markets traded through macro releases.
03Energy led sector gains with XLE the top-performing ETF, while utilities (XLU) and real estate (VNQ) were notable laggards.
04Analog Devices and Garmin reported strong results and raised dividends, supporting their shares and influencing semiconductor and hardware supplier re-ratings.

References