Europe close: Markets fall on raft of earnings, US data

19th Feb 2026 15:43

(Sharecast News) - European stocks closed lower on Thursday as investors digested a fresh wave of corporate earnings and assessed minutes from the US Federal Reserve that revealed divisions over the future path of interest rates, with geopolitical tensions also keeping sentiment fragile.

The pan-European Stoxx 600 fell 0.64% to 624.64, with Germany's DAX down 1.03% at 25,017.98, France's CAC 40 off 0.36% at 8,398.78 and the FTSE 100 slipping 0.55% to 10,627.04.

"Hopes of a market rally have been dashed while potential military action dominates the headlines," said Chris Beauchamp, chief market analyst at IG, adding that "in a quieter period for markets today news, or lack of it, around Iran is the driver for the day".

"Each time president Trump sounds more conciliatory the market rallies, while hints of action cause it to weaken."

He also noted that "hawkish Fed minutes last night have cast their own shadow over the day, as they remind investors that simply placing Kevin Warsh in charge of the Fed is unlikely to lead to Trump getting his own way very quickly, and sets us up for more Fed drama even after Powell steps down."

Fed minutes, US data in focus

Fed minutes showed policymakers split on rates, with some officials suggesting borrowing costs could even rise if inflation proves stubborn.

The prospect of tighter policy set up a potential clash with US president Donald Trump, who has been pressing for rapid cuts.

US data offered a mixed picture: - initial jobless claims fell by 23,000 to 206,000 in the week ended 14 February, while continuing claims rose by 17,000 to 1.86 million.

The four-week moving average edged down by 1,000 to 219,000 and the insured unemployment rate was unchanged at 1.2%.

Separately, wholesale inventories rose 0.2% month-on-month in December to $917.2bn, up 2.8% on an annual basis.

Beauchamp said volatility had also begun to reassert itself.

"Earlier in the week it looked like we had another typical volatility slam, given the sharp drop in the Vix.

"But the index has turned around as geopolitics dominates the headlines frustrating any attempts at mounting a sustained bounce in beaten-down sectors like software.

"This could go on for some time, since it is far from certain that the US will make a move, despite the extensive - and expensive - buildup around Iran."

In the euro area, construction output rose 0.9% month-on-month in December, while production across the wider EU increased 1.2%, according to Eurostat.

On a yearly basis, construction activity in the single currency bloc fell 0.9%, while EU output was unchanged.

For 2025 as a whole, output was flat in the euro area and up 0.5% across the EU compared with 2024.

Within the eurozone, civil engineering rose 2.3% on the month, building construction gained 0.9% and specialised activities increased 0.6%.

However, building construction was down 3.3% year-on-year, while civil engineering grew 1.6% and specialised activities edged 0.2% higher.

In the UK, the Confederation of British Industry's latest Industrial Trends survey showed the downturn in manufacturing eased in the three months to February, with a net balance of -14% reporting lower output volumes, compared with -25% in January.

Output fell in 13 of 17 sub-sectors, led by metal products, food, drink and tobacco, and mechanical engineering.

Total order books remained "below normal" at -28% in February versus -30% in January, while export order books improved slightly to -26% from -30%.

Expectations for average selling price inflation stayed elevated at 26%, down from 29%.

CBI senior economist Cameron Martin said the easing in output followed "a downbeat period around the turn of the year", but warned that "many firms continue to report customers holding back amid low confidence and elevated cost pressures".

Energy stocks rise with oil prices, Arcadis slumps

In equities, energy stocks were among the gainers as oil prices extended their rebound.

Brent crude futures were last up 2.02% at $71.77 a barrel on ICE after peace talks between Russia and Ukraine ended without progress and negotiations between the US and Iran stalled.

BP rose 2.62%, Shell added 0.51% and Eni gained 1.39%.

Orlen advanced 3.05% despite reporting lower-than-expected fourth-quarter net profit, as stronger refining margins were offset by weaker gas and oil prices and asset impairments.

On the downside, Arcadis slumped 9.55% after annual revenue missed estimates.

Airbus fell 6.75% after cutting production targets amid a dispute with engine supplier Pratt & Whitney over a key supply agreement.

Rio Tinto dropped 3.67% after reporting a 14% fall in net earnings, reflecting weaker iron ore prices.

Centrica declined 4.13% as it suspended share buybacks following a 39% plunge in profits.

Renault reversed earlier gains to close 3.1% lower, despite a 3% rise in 2025 revenue to €57.9bn, after net income swung to a €10.9bn loss, with chief executive François Provost citing a "challenging market environment".

Reporting by Josh White for Sharecast.com.