Morning Wrap: ASX 200 to bounce, S&P 500 flat as tech dips but defensives and small caps soar

ASX 200 futures are up 51 pts (+0.51%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks flattish after giving up early gains

• Equal-weight S&P 500 (+1.04%) continues to outperform by a wide margin, driven by strength in cyclicals, defensives and small caps

• US January CPI came in slightly cooler-than-expected amid a deceleration in shelter, energy and used cars

Let's dive in.

Overnight Summary

Mon 16 Feb 26, 8:23am (AEST)

Name	Value	% Chg
Major Indices
S&P 500	6,836	+0.05%
Dow Jones	49,501	+0.10%
NASDAQ Comp	22,547	-0.22%
Russell 2000	2,647	+1.18%
Country Indices
Canada	33,074	+1.87%
China	4,082	-1.26%
Germany	24,915	+0.25%
Hong Kong	26,567	-1.72%
India	82,627	-1.25%
Japan	56,942	-1.21%
United Kingdom	10,446	+0.42%

Name	Value	% Chg
Commodities (USD)
Gold	5,043.92	+2.48%
Copper	5.803	+0.30%
WTI Oil	62.89	+0.08%
Currency
AUD/USD	0.707	-0.03%
Cryptocurrency
Bitcoin (USD)	68,543	-2.26%
Ethereum (AUD)	2,764	-6.67%
Miscellaneous
US 10 Yr T-bond	4.056	-1.17%
VIX	20.6	-1.06%

S&P 500 SESSION CHART

S&P 500 flat, off best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished flattish but gave up some of its midday strength heading into the close

• Breadth was again, very solid, with the Equal-weight S&P 500 (+1.04%) outperforming by a wide margin 

• US equities finished broadly lower last week, with the S&P 500 down for a second-straight week and Nasdaq lower for a fifth straight week

• Equal-weight S&P 500 up for a second straight week and outperformed the cap-weighted index by 169 bps last week

• US weekly recap: Russell 2000 (-0.89%), Dow (-1.23%), S&P 500 (-1.39%), Nasdaq (-2.10%)

• Market continues to highlight a broadening rally, with cyclicals, defensives and small caps continue to trend higher, while Mag-7 and software stocks struggle for upside

• AI disruption fears underline appeal of Asian tech hardware producers with strong pricing power (BBG)

• JPMorgan strategists advises selling 2-year Treasuries due to resilient growth outlook (BBG)

• Yen set for best week in 15 months after Takaichi's election win (RT)

• Market turmoil reflects fears AI will both disrupt companies and fail to justify Big Tech's massive spending (BBG)

• Deteriorating earnings outlook is darkening the outlook for Chinese equities (BBG)

• JPMorgan volatility indexes show EM currencies have been less volatile than G7 peers for approximately 200 straight days (YF)

STOCKS

• Applied Materials guides stronger-than-expected revenue, notes strong demand for DRAM equipment from chip clients, shares rally 8% (RT)

• Airbnb reports strong Q4 bookings and upbeat revenue outlook, driven by travel demand and new flexible payment options (CNBC)

• IBM plans to triple entry-level roles in 2026 covering wide range of departments (BBG)

• Mentions of AI disruption on management calls almost doubled compared to the previous quarter (BBG)

• DraftKings shares dive 13% after issuing pessimistic 2026 sales and profit forecasts (BBG)

• Expedia's Q4 revenue surges at fastest rate in three years, driven by strong US travel demand, shares still tank 6% (BBG)

• Pinterest shares drop as revenue growth slows and advertiser pullback impacts Q4 earnings outlook (CNBC)

TARIFFS & TRADE

• Trump admin planning to reduce some steel and aluminum tariffs, citing consumer price impacts on goods (BBG)

• US and Taiwan finalise trade pact that cuts tariff rate to 15% from 20%, Taipei to increase American purchase commitments (FT)

• US unveils guidance for clean energy tax credits that bans use of material from China and other adversaries (BBG)

CENTRAL BANKS

• BOJ's Tamura sees good chance of achieving inflation target as early as Spring (RT)

• ECB's Kazaks says the central bank has yet to see full impact of euro appreciation (BBG)

GEOPOLITICS

• Pentagon dispatches USS Gerald R. Ford aircraft carrier to the Middle East amid heightened tensions with Iran (NYT)

• US military is making preparations for a potentially week-long military operation in Iran (RT)

• Iran and US set to hold second round of talks on Wednesday, Iran signals flexibility on nuclear program (RT)

• US lawmakers urge Taiwan to advance defense spending amid increased threats from China (RT)

ECONOMY

• US January CPI up 0.2% month-on-month vs. 0.3% ests, core CPI in-line with ests at 0.3%, notable areas of deflation include Energy (-1.5%), used cars (-1.8%) and deceleration in shelter index, up 0.2% vs. 0.4% a month ago (BBG)

• Swiss inflation rose 0.1% year-on-year in January, limiting pressure on SNB to consider negative interest rates (BBG)

• China new home prices maintain pace of declines, prices down 0,4% month-on-month in January (RT)

ASX TODAY

An absolutely stacked day for corporate earnings. We’ll be moving the usual coverage from here, to the Live Blog. I’ll try to cover as many 1H26 results as possible before market open. 

WHAT TO WATCH TODAY

• Resource bounce: The price we pay for such a big and broad-based commodity rally is volatility (e.g. gold is still trading around ~23% above its 200-day moving average). A rather uneven bounce for commodities overnight, with notable gains for gold (+2.4%), silver (+2.8%) and palladium (+3.7%), though copper (+0.2%) was a little flat. This drove a 5.7% bounce for the VanEck Gold Miners ETF, following a 7.2% dip in the prior session.

BROKER MOVES

• Cochlear upgraded to Hold from Trim; target cut to $214.93 from $299.54 (MORG)

• Westpac upgraded to Trim from Sell; target up to $35.12 from $32.20 (MORG)

Stocks trading ex-dividend: 

• Mon 16 Feb: None

• Tue 17 Feb: Bravura Solutions (BVS) – $0.102, Computershare (CPU) – $0.55, Spheria Emerging Companies (SEC) – $0.013, WAM Income Maximiser (WMX) – $0.005

• Wed 18 Feb: Commonwealth Bank of Australia (CBA) – $2.35, Regal Partners Global Investments (RG1) – $0.06

• Thu 19 Feb: Teaminvest Private Group (TIP) – $0.015

Other ASX corporate actions today:       

• Dividends paid: Apiam Animal Health (AHX)

• Earnings: Ansell (ANN), Audinate Group (AD8), Aurizon Holdings (AZJ), Australian Clinical Labs (ACL), Bendigo & Adelaide Bank (BEN), BlueScope Steel (BSL), EVT (EVT), Fiducian Group (FID), GWA Group (GWA), JB Hi-Fi (JBH), oOh!media (OML), Treasury Wine Estates (TWE)

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

• 10:50 am: Japan GDP (Q4)