European markets posted modest gains Friday, February 20, 2026, as investors remained cautious amid developments in the Middle East and anticipated a decision from U.S. President Donald Trump regarding potential military action if a nuclear agreement isn’t reached.
Milan’s FTSE MIB rose 0.9%, recovering from the previous day’s decline, which was amplified by utility stock performance following a novel energy decree and a significant drop in Fincantieri shares after a capital placement. The spread currently stands around 60 basis points. Paris led gains among major European markets, up approximately 0.6%, whereas Frankfurt showed a more subdued performance.
European PMIs and U.S. Inflation Data Drive Market Activity
Economic data released Friday influenced market sentiment. European Purchasing Managers’ Indices (PMIs) indicated an improving economy. The Eurozone manufacturing PMI registered an expansionary reading of 50.8 points in February, up from 49.5 points the prior month. The composite PMI also improved, reaching 51.9 in February from 51.3 in January. “In February, the rate of growth of the Eurozone economy reached its highest level in the last three months, with a particularly noticeable improvement in the manufacturing sector, where production recorded the fastest increase since August of last year,” noted S&. P Global. Germany’s producer prices decreased 0.6% month-over-month and 3% year-over-year in January. In the U.S., investors are awaiting key inflation data – the Personal Consumption Expenditures (PCE) price index – which is closely watched by the Federal Reserve. Wall Street closed lower Thursday, February 19, 2026, with the Dow Jones down 0.54%, the S&P 500 down 0.28%, and the Nasdaq down 0.31%. Analysts are also scrutinizing the U.S. Deficit, which has only decreased by 0.2% since 2024, reaching the third-highest level in history, suggesting that President Trump’s tariffs have not yet yielded the anticipated results.
Moncler Leads Gains in Milan, Unipol Also Strong
In Milan, Moncler shares surged following the release of its 2025 earnings, which exceeded expectations. Unipol also saw significant gains, driven by strong 2025 results. The banking sector as a whole performed well, with Mediobanca, Banco Bpm, Banca Mps, and Banca Pop Er all posting gains. Oil stocks were weaker, reflecting a decline in crude oil prices. Tenaris, Saipem, and Eni were among the worst performers on the FTSE Mib. Utility stocks opened lower but later recovered. Analysts are assessing the impact of a new energy decree issued by the government, which includes a 2% increase in the regional tax on productive activities (IRAP) for energy companies for the fiscal years 2026-27.
Oil Prices Volatile, Euro Trades Below $1.18
Oil prices are volatile as investors monitor the situation in the Middle East, particularly negotiations between Iran and the United States. Iran is a major oil producer and controls the Strait of Hormuz. West Texas Intermediate (WTI) crude for March delivery fell 0.1% to $66.35 a barrel, as did Brent crude for April delivery, trading at $71.61. Natural gas prices at Amsterdam rose 1.18% to €33.9 per megawatt-hour. Gold and silver also continued to rise, with spot prices at $2,015 per ounce (+0.3%) and $78.9 per ounce (+0.64%), respectively. The euro is currently trading at $1.158, while Bitcoin is recovering, up 0.44% to $67,229.
Mixed Asian Markets, Tokyo Weakens
Asian equity markets are mixed, with concerns about the risks of artificial intelligence and potential conflict between the United States and Iran weighing on major indices. The Tokyo Stock Exchange closed Friday with losses, as investors took profits ahead of a long holiday weekend. The benchmark Nikkei 225 index fell 1.12% to 36,825.70. The yen weakened to 155.10 against the dollar and 182.30 against the euro. Shares of major banks and other financial institutions declined, impacted by concerns about private credit companies exposed to the risk that artificial intelligence could disrupt their business. Toyota Motor Corp. Fell 3.9% and Sony fell 3.3%.
