Stay up to date with the latest market trends, economic shifts and key financial developments across the UK, US, and Asia – giving you clear insights to support client conversations.
This week's headlines:
- Japan’s political swing boosts markets – following a snap election, Prime Minister Sanae Takaichi led the Liberal Democratic Party to a resounding victory. Japanese equities responded positively, reflecting renewed investor optimism.
- UK clings to growth – December GDP rose 0.1% month-on-month, matching expectations. Rising service activity offset weakness in manufacturing and production, keeping growth fragile but intact.
- China faces deflationary pressure – annual inflation slowed to just 0.2% in January, dragged down by falling food prices and sharp energy price drops.
- US job market surprises on the upside – non-farm payrolls grew by 130,000 in January, almost double forecasts. Gains were concentrated in healthcare, social assistance, and construction, even as federal employment fell following a 2025 deferred redundancy program.
- Schroders joins US investment giant Nuveen – the UK based, independent asset manager will be acquired for £9.9bn, with the Schroders brand retained. Schroders shares jumped on the news.
What this means for financial advisers and clients
Takaichi’s snap election gamble has paid off. Securing a two-thirds majority in Japan’s lower house gives her government a super-majority, making it easier to pass legislation and advance major spending plans. Markets reacted positively: the Nikkei 225 jumped over 5% initially and continued climbing through the week.
For advisers, the key takeaway is that political stability in Japan is supporting equity sentiment, even if the details of specific policies remain unclear. Meanwhile, despite threats of a sell-off, the Yen defied expectations and rose as investors were reassured by Takaichi’s commitment to fiscal stability.
Chart of the week - morale vs markets
Source: Ruffer, February 2026
Why this matters
Despite losing the dominance seen in 2023 and 2024, US markets delivered strong returns in 2025.
This momentum has been led by the rapid growth of AI, pushed by major tech firms, with advances now starting to ripple across other industries – boosting productivity and supporting profit margins. The result: the S&P 500 is trading comfortably above its five-year average, as the chart shows.
But the picture isn’t uniform. Consumer sentiment (blue line) is lagging. Traditionally, sentiment and markets moved in tandem, but that link is fraying. Many US workers face job disruption from AI, while rising costs in areas like energy are squeezing households, leaving the average consumer worse off and less able to invest and enjoy market gains.
With mid-terms approaching, the US administration faces pressure to lift sentiment. Options such as increased spending or stimulus could help, but risk reigniting inflation and forcing a rethink of the current interest rate cycle – potentially creating headwinds for markets.
Finding a happy balance between growth, stability, and household wellbeing will be key to keeping the world’s largest economy on track.
The Markets
UK sees marginal gains
Despite some disruption in software and wealth management, UK markets rose this week, boosted by the Schroders acquisition and gains across the basic materials and consumer goods sectors.
US rout continues
US markets fell as AI concerns continued to hit industries such as software, real estate, and logistics. Nvidia continued to gain ground as other Mag-7 stocks fell.
Mixed bag across Emerging Markets
With some mirroring of developed market falls – alongside renewed deflation fears – Chinese markets posted losses for the week. However, other Asian markets such as Taiwan and Korea remained in positive territory.
Oil flat but gold rebounds
Gold recovered some ground this week, after plunging at the end of January, as geopolitical tensions continue to rise. This comes despite a drop on Thursday on strong US jobs numbers.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 0.32% | 4.79% |
| FTSE 250 | 0.48% | 4.02% |
| S&P 500 | -1.71% | -1.60% |
| NASDAQ | -0.36% | -3.63% |
| FTSE Developed Europe Ex-UK | 0.59% | 4.07% |
| FTSE Emerging Markets | 2.72% | 6.52% |
| FTSE Japan | 7.50% | 15.16% |
| Brent Crude | -0.13% | 10.89% |
| Gold Spot | 4.14% | 14.90% |
| UK 10yr Gilt yield | -11bp | -5bps |
| US 10yr Treasury yield | -7bps | -7bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 12th February 2026.
2026 Let's Talk Markets webinars
The next Let's Talk Markets webinar takes place on Thursday, 5th March 2026, continuing our series of insights for the year ahead.
Our team is already shaping a programme based on what you’ve told us you value most: sharper market insight, practical takeaways, and topics timed to be most relevant for you.
A quick housekeeping note: you’ll need to register again. Each year’s series is brand new, and previous sign-ups don’t carry over.
This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
