Global markets remained cautious on Wednesday, February 18, 2026, as investors navigated a complex landscape of cooling inflation and persistent geopolitical friction. Major U.S. indices showed marginal movement, with the S&P 500 edging up 0.1% to 6,843.22, while the Dow Jones rose 0.07% to 49,533.19. The tech-heavy Nasdaq Composite saw a modest gain of 0.14%, ending the session at 22,578.38. Market participants are focused on the Federal Reserve's current pause in rate adjustments. The federal funds rate remains held in the 3.5% to 3.75% range. Investors are scrutinizing recent Fed communications for clarity on the path forward, especially following the nomination of Kevin Warsh to succeed Jerome Powell. While the economy remains solid, a recent uptick in the VIX to 20.29 reflects a slight increase in underlying market anxiety. In Asia, the Japanese yen showed stability against the dollar, trading near the 156.50 level. This follows reports of a manufacturing sector recovery, with the Japan Manufacturing PMI hitting 51.5 in early 2026—the strongest expansion in factory activity since mid-2022. Domestic sentiment is bolstered by rising machine tool orders, which surged 25.3% in January, signaling robust capital investment. Geopolitical developments have provided a mix of optimism and caution. In Geneva, U.S. and Iranian negotiators reported progress on "general guiding principles" for a potential nuclear agreement. While significant gaps remain regarding uranium enrichment and verification, both sides characterized the latest round as constructive, reducing immediate fears of military escalation in the region. Simultaneously, trilateral peace negotiations between Ukraine, Russia, and the U.S. continued in Switzerland. Despite ongoing airstrikes targeting Ukrainian energy infrastructure, delegations have moved into discussions on the "mechanics of possible decisions." Ukraine maintains its stance against territorial concessions in the Donetsk region, keeping expectations for a total breakthrough measured as the conflict nears its four-year mark. European equity markets reflected this wait-and-see approach. The DAX in Germany gained 0.8% to reach 24,998.40, while the FTSE 100 in London rose 0.79% to 10,556.17. Global growth for 2026 is currently projected at 3.3%, a slight upward revision that suggests resilience despite the shifting trade policies and high-stakes diplomacy currently dominating the headlines.