Category: Market Summary

European equity markets drifted modestly lower on Friday, with indices on course to end a five-week run of gains as investors remained cautious amid renewed geopolitical and trade-related tensions tied to Greenland.

On the data front, preliminary survey figures from S&P Global indicated that private-sector activity across the euro area continued to expand at a steady pace in January. Manufacturing output returned to growth territory, while momentum in the services sector eased to its weakest level in four months.

The HCOB flash composite output index held steady at 51.5 in January, matching December’s reading and falling just short of expectations for a slight uptick to 51.6.

The pan-European Stoxx 600 index slipped 0.2%, a modest pullback following a strong 1% rally in the previous session. France’s CAC 40 declined 0.3%, while Germany’s DAX hovered around flat territory. In contrast, the UK’s FTSE 100 outperformed slightly, rising 0.1%.

In corporate developments, shares of French banking group BNP Paribas (EU:BNP) moved lower following reports that the lender plans to cut roughly 1,200 jobs by the end of 2027.

UK defense firm Babcock International (LSE:BAB) also traded down after announcing changes to its chief executive leadership.

Germany’s BASF (TG:BAS) came under pressure after the chemicals group cautioned that earnings are likely to weaken.

On the upside, Swiss composite materials specialist Gurit Holding (LSE:0QQR) surged after reporting 2025 sales that exceeded its own guidance.

Swedish telecom equipment maker Ericsson (NASDAQ:ERIC) was another standout performer, with shares jumping after the company topped quarterly earnings forecasts and unveiled a SEK 15 billion share buyback program.

U.S. equity futures moved cautiously on Friday as investors balanced a heavy flow of corporate earnings and economic signals against easing geopolitical frictions between the United States and Europe. Intel (NASDAQ:INTL) posted a fourth-quarter loss and warned of additional pressure from supply constraints linked to booming demand from artificial intelligence data centres. At the same time, TikTok outlined a new joint venture designed to preserve its U.S. presence. Elsewhere, the Bank of Japan held interest rates steady while signalling a tightening bias, and gold surged to fresh record highs.

Futures trade near flat

Stock index futures in the U.S. hovered just below unchanged levels following a volatile week dominated by trade and geopolitical headlines. At 03:50 ET, Dow futures were down 33 points, or 0.1%, S&P 500 futures slipped 4 points, or 0.1%, and Nasdaq 100 futures declined 43 points, or 0.2%.

Wall Street ended higher in the previous session after President Donald Trump retreated from plans to impose additional tariffs on a number of European countries as early as February 1. Trump said on Thursday that the U.S. had secured full and permanent access to Greenland after talks with NATO allies. However, the lack of clarity around the agreement and Washington’s earlier demands regarding the semi-autonomous Danish territory continued to raise concerns among European officials.

As tensions over Greenland appeared to ease, market focus shifted back to an intensifying earnings season and the Federal Reserve’s policy decision scheduled for next week.

Intel flags tougher conditions

Intel shares fell sharply in extended trading after the chipmaker reported a loss for the fourth quarter and issued a cautious outlook for the current period. The company recorded a net loss of $333 million in the final quarter of its fiscal year, undershooting market expectations despite recent backing from major investors such as Nvidia and support from the U.S. government.

Management highlighted surging demand from AI-driven data centres as a key factor behind ongoing supply shortages across the semiconductor industry. Chief Financial Officer David Zinsner said these constraints could persist well into 2026.

For the first quarter, Intel now expects a loss of $0.21 per share, underlining the scale of the challenge facing Chief Executive Lip-Bu Tan as the company competes in an AI chip market dominated by Nvidia and rival Advanced Micro Devices. Investors were also left wanting more detail, as Intel deferred updates on customers for its foundry business and offered limited information on uptake of its next-generation 14A manufacturing technology.

“[T]here weren’t any customer announcements made for the 14A […] while some investors were hoping for a big name, like possibly Apple,” analysts at Vital Knowledge said in a note.

TikTok announces U.S. joint venture

TikTok said it will move forward with a Trump administration-backed joint venture that will allow the widely used short-form video app to continue operating in the United States. The platform has long been under scrutiny from U.S. lawmakers, who have raised concerns that its ownership structure — with parent company ByteDance based in China — poses risks to national security and data privacy.

Trump previously sought to ban TikTok in 2020 and later opted not to enforce a 2024 law passed by Congress that required ByteDance to divest its U.S. assets or face a nationwide ban. Under the new arrangement, TikTok’s U.S. operations will be managed by a newly created entity viewed as more aligned with Washington, with a mandate to protect user data and strengthen cybersecurity.

U.S. and international investors, including Oracle (NYSE:ORCL), private equity firm Silver Lake and Abu Dhabi-based MGX, will hold 80.1% of the joint venture, while ByteDance will retain a 20% stake. Trump, who has credited TikTok with helping him secure a second term in office, said the app “will now be owned by a group of Great American Patriots and Investors.”

Bank of Japan keeps rates unchanged

The Bank of Japan left interest rates unchanged on Friday, maintaining its benchmark overnight call rate at 0.75% following a rate increase in December. Eight of the nine members of the policy board supported the decision, while board member Hajime Takata dissented in favour of a 25 basis point hike.

While the pause was widely anticipated, the central bank upgraded its economic growth and inflation forecasts, citing expectations of increased fiscal support. Policymakers reiterated that rates would continue to rise if growth and inflation develop in line with projections, as they seek to anchor inflation around the 2% target.

The BOJ raised its real GDP growth forecast for fiscal 2025 to a range of 0.8% to 0.9%, up from its earlier estimate of 0.6% to 0.8%.

“Given that the real policy rate is still deeply negative, further policy tightening is therefore all but guaranteed,” Capital Economics analysts said, adding that they expect the central bank to move before at least July.

“Granted, the looming sharp fall in headline inflation puts the Bank in an awkward position, particularly if [Prime Minister Sanae] Takaichi also suspends the sales tax on food. But looking past those distortions, price pressures will remain firm.”

Gold surges to record highs

Gold prices climbed to record levels in Asian trading on Friday, edging closer to the closely watched $5,000-an-ounce mark after Trump’s comments on Iran boosted demand for safe-haven assets. Silver and platinum also reached fresh highs.

Spot gold rose as much as 0.7% to a record $4,967.48 an ounce, while February gold futures advanced more than 1% to $4,969.69. Spot silver jumped nearly 3% to $99.0275, and spot platinum gained almost 1% to $2,692.31 an ounce.

European equities traded mostly lower on Friday, with investors remaining cautious as heightened geopolitical tensions continued to weigh on sentiment toward the end of a turbulent week.

By 08:10 GMT, Germany’s DAX was down 0.1% and France’s CAC 40 slipped 0.2%, while the UK’s FTSE 100 edged 0.2% higher.

Elevated political uncertainty

European stocks had rebounded on Thursday after U.S. President Donald Trump softened his stance on imposing trade tariffs tied to gaining ownership of Greenland, the autonomous Danish territory. Even so, all three major indices remained on track for weekly losses as political risks continued to overshadow markets.

Geopolitical concerns intensified after Trump raised the prospect of military action against Iran, telling reporters aboard Air Force One late Thursday that the United States had naval forces moving toward the region. “We have an armada… heading in that direction, and maybe we won’t have to use it,” Trump said. “I’d rather not see anything happen, but we’re watching them very closely,” he added, warning Tehran against killing protestors or resuming its nuclear programme.

Meanwhile, Ukrainian President Volodymyr Zelenskyy criticised Europe’s response to rising geopolitical threats during his speech at the World Economic Forum in Davos, Switzerland. He accused Europe of being “lost” while trying to persuade Trump to “change” and back the continent, rather than acting collectively to defend itself.

Tensions were further compounded by the decision of most European countries not to participate in Trump’s proposed “Board of Peace,” originally intended to oversee the demilitarisation and reconstruction of Gaza. Concerns were raised over the body’s structure and whether it could ultimately rival the United Nations.

UK retail sales surprise

Later in the session, investors were set to assess a fresh round of economic indicators, including January PMI readings for the euro area, as signs of a tentative recovery emerge.

Ahead of those releases, UK retail sales delivered an upside surprise, rising 0.4% in December from November as shoppers returned to stores after declines in October and November. Economists surveyed by Reuters had forecast a 0.1% monthly fall.

Corporate updates in focus

In European company news, Ericsson (BIT:1ERICB) announced plans for a substantial share buyback and a higher dividend, after a surge in net cash helped offset weak conditions in the mobile networks market.

UK defence group Babcock International Group (LSE:BAB) said it remains on track to achieve its full-year margin target of 8%, supported by strong organic revenue growth in the third quarter, with potential upside linked to progress on its Indonesian Arrowhead programme.

Meanwhile, Pets at Home Group Plc (LSE:PETS) confirmed that Sarah Pollard will join the company in March as chief financial officer designate.

Investor attention was also firmly on the technology sector after Intel (NASDAQ:INTC) issued weaker-than-expected first-quarter revenue and profit guidance late Thursday. The outlook triggered a sharp sell-off in extended U.S. trading, with the chipmaker citing difficulties aligning supply with surging demand for traditional server chips used in artificial intelligence data centres.

Oil prices head for weekly gains

Oil prices rose on Friday and were on course for a fifth consecutive weekly gain, driven by fears of supply disruptions following Trump’s comments on Iran.

Brent crude futures climbed 0.5% to $64.39 a barrel, while U.S. West Texas Intermediate rose 0.6% to $59.69. Both benchmarks were tracking weekly gains of just under 1%.

Reports indicated that a U.S. aircraft carrier and several destroyers were expected to arrive in the Middle East in the coming days, heightening concerns of renewed military conflict. Iran remains one of the largest oil producers within the Organization of Petroleum Exporting Countries and a key supplier to major importer China.

U.S. stock futures signalled a higher open on Thursday, indicating that equities could extend the sharp rebound seen in the previous session.

Investor sentiment has been buoyed by signs of de-escalation in the dispute surrounding President Donald Trump’s bid to gain control of Greenland. On Wednesday, Trump ruled out the use of military force and later said that a “framework” agreement on the Arctic territory was taking shape.

Following what he described as a “framework” understanding reached with NATO Secretary General Mark Rutte, Trump also stepped back from earlier threats to impose sanctions on European countries that opposed his plans.

Some market watchers view the renewed strength in equities as a revival of the so-called “TACO trade” — shorthand for “Trump Always Chickens Out” — reflecting the belief that the president often retreats after rattling markets with aggressive tariff threats.

“There are a lot of similarities with the Liberation Day market wobble in April 2025 and now,” said Russ Mould, investment director at AJ Bell. “In both situations, Trump took an aggressive stance and then backed down after financial markets wobbled.”

He added, “The US president has a keen eye on what happens with bonds and stocks, and the last thing he wants is to be accused of destroying people’s wealth.”

Markets were highly volatile on Wednesday. Stocks surged early, pared back gains by late morning, and then rallied again in the afternoon to close sharply higher.

All three major benchmarks finished the session with solid advances, partially recouping Tuesday’s steep losses. The Dow Jones Industrial Average rose 588.64 points, or 1.2%, to 49,077.23. The Nasdaq Composite climbed 270.50 points, or 1.2%, to 23,224.82, while the S&P 500 advanced 78.76 points, or 1.2%, to 6,875.62.

The swings reflected investors reacting to Trump’s evolving remarks on Greenland. Early buying followed his comments at the World Economic Forum in Davos, Switzerland, where he explicitly ruled out military action.

“We probably won’t get anything unless I decide to use excessive strength and force, where we would be, frankly, unstoppable. But I won’t do that. Okay?” Trump said.

“Now everyone’s saying, ‘Oh, good.’ That’s probably the biggest statement I made, because people thought I would use force,” he added. “I don’t have to use force. I don’t want to use force. I won’t use force.”

Trump instead called for “immediate negotiations” with Denmark to “discuss the acquisition of Greenland by the United States.”

Later in the day, sentiment improved again after Trump said on Truth Social that the “framework” agreement emerged from a “very productive” meeting with NATO’s secretary general, and that he would not proceed with tariffs he had threatened against several European nations.

Sector performance was broadly positive. Oil service stocks led gains as crude prices moved higher, with the Philadelphia Oil Service Index jumping 4.8% to its highest close in more than a year.

Computer hardware shares also surged, pushing the NYSE Arca Computer Hardware Index up 4.4%, while biotechnology stocks climbed, lifting the NYSE Arca Biotechnology Index by 3.6%.

Strength was also evident in semiconductor, transportation and housing stocks, although software and gold-related shares lagged the broader market rally.

U.S. equity futures moved higher, reflecting a sense of relief after President Donald Trump said he would not go ahead with new tariffs on several European countries tied to his stance on Greenland. According to media reports, the decision followed talks with NATO and European officials, though concrete details on the so-called “framework of a future deal” remain limited. Gold prices eased back from record levels, while investors also looked ahead to earnings from Intel (NASDAQ:INTC) and key U.S. inflation data closely monitored by the Federal Reserve.

Futures point higher

U.S. stock futures traded in positive territory on Thursday, as markets welcomed Trump’s reversal on additional tariffs targeting Europe.

By 03:00 ET, Dow futures were up 61 points, or 0.1%, S&P 500 futures gained 20 points, or 0.3%, and Nasdaq 100 futures rose 117 points, or 0.5%.

Wall Street ended higher on Wednesday, rebounding from its steepest drop since October in the previous session. The recovery followed Trump’s announcement that he had reached a “framework of a future deal” with NATO leadership concerning Greenland.

After days of warning that new tariffs would be imposed on eight European countries from February 1 unless the U.S. was allowed to assume control of the semi-autonomous Danish territory, Trump confirmed those measures would not be implemented.

Investors were also digesting a growing wave of corporate earnings as reporting season gathered momentum. United Airlines shares jumped more than 2% after a strong fourth-quarter profit beat, while Netflix fell over 2% after issuing softer-than-expected forward guidance.

Trump softens stance on Greenland tariffs

Trump’s policy reversal, which reportedly came after behind-the-scenes discussions with NATO and European leaders, helped ease concerns that the Greenland dispute could further strain transatlantic relations.

In a social media post, Trump said the agreement “if consummated” would be “a great one for the United States of America” and for “all Nations” within NATO.

He offered few additional details, noting only that “additional discussions” are taking place around the proposed “Golden Dome” defence system “as it pertains to Greenland.” The Wall Street Journal reported, citing European officials familiar with the talks, that negotiations are likely to focus on a potential U.S.-Denmark agreement covering troop deployments on the island and a broader expansion of Europe’s security role in the Arctic.

The report also said the U.S. would gain a first right of refusal over Greenland’s mineral resources. The territory holds significant rare-earth reserves, critical to many industries and a recurring theme in recent U.S. trade negotiations, particularly with China.

Earlier on Wednesday, Trump also appeared to rule out the use of military force to secure Greenland while addressing delegates at the World Economic Forum in Davos.

The rebound in risk assets was accompanied by a firmer U.S. dollar. Analysts at ING said that while investors may still seek more clarity on the Greenland agreement, the Federal Reserve’s policy meeting next week “means some refocus on macro drivers is on the cards.”

Gold pulls back from highs

Gold prices slipped in European trading after touching record levels in the prior session, as Trump’s tariff retreat reduced demand for safe-haven assets.

Spot gold edged down 0.1% to $4,826.25 an ounce by 03:40 ET, retreating from a record $4,888.1 reached a day earlier. U.S. gold futures fell 0.2% to $4,826.39 an ounce.

Bullion had surged more than 6% over the past three sessions amid heightened geopolitical uncertainty tied to Greenland and potential tariffs on European imports, pushing prices close to the psychological $5,000 mark.

Intel earnings ahead

Intel is scheduled to report results after the U.S. market close on Thursday.

Under CEO Lip-Bu Tan, the California-based chipmaker has been cutting costs and reinforcing its balance sheet as competition intensifies in the PC and server processor markets.

Investors are also watching to see whether Intel’s efforts to gain traction in artificial intelligence chips are starting to pay off. The company received significant backing last year from Nvidia, SoftBank and the U.S. government, with Nvidia alone purchasing $5 billion worth of Intel shares in December.

Earlier this month, Intel unveiled a new AI-focused laptop chip, aiming to reassure markets about products built on its next-generation manufacturing technology.

Other companies reporting earnings today include Procter & Gamble and GE Aerospace.

Inflation data in focus

On the economic front, attention will turn to the U.S. personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge.

The November core PCE reading is expected to hold at 0.2% month on month and 2.8% year on year.

Earlier Labor Department data showed headline U.S. consumer inflation was unchanged in December, while underlying price pressures eased slightly. ING analysts said the PCE report could reinforce signs of “muted” inflation, a key factor shaping the Fed’s interest-rate outlook.

Employment data will also be watched later today, with weekly jobless claims due for release. Last week, first-time claims fell below 200,000.

European defence shares moved lower on Thursday after U.S. President Donald Trump said he would not move ahead with new tariffs on European countries, pointing to progress toward “the framework of a future deal” related to Greenland.

In early trading, Germany’s Rheinmetall (TG:RHM) fell around 2% by 09:33 GMT. Italy’s Leonardo SpA (BIT:LDO) declined 1.8%, while France’s Thales (EU:HO) was down 1.2%. Sweden’s SAAB (BIT:1SAAB) dropped 2.2%.

Trump said the shift in stance followed discussions with NATO secretary-general Mark Rutte, which he described as “very productive.” He added that talks would continue and could result in an agreement that, “if consummated,” would be “a great one” for both the United States and NATO allies.

“Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st,” Trump wrote on Truth Social. He also noted that “additional discussions are being held concerning The Golden Dome as it pertains to Greenland,” referring to his proposed missile defence initiative.

Speaking later on Wednesday in an interview with CNBC, Trump confirmed that the tariff threat had been withdrawn. “We took that off the table,” he said, referring to duties previously aimed at European nations opposing a U.S. takeover of Greenland. “Because we had pretty much the concept of a deal.”

He suggested the emerging framework could include Greenland’s natural resources. “They’re going to be involved in mineral rights and so are we.”

The comments marked a further retreat from earlier tariff rhetoric and signalled a softer tone on Greenland. They came just hours after Trump told an audience at the World Economic Forum that he would not use force to acquire the territory from Denmark, while urging European leaders to back the proposal.

Europe, Trump said, faced a clear decision. “You can say yes and we will be very appreciative, or you can say no and we will remember.”