Category: Market Summary

U.S. stock index futures are indicating a largely flat start to trading on Monday, pointing to subdued market conditions after the mixed performance seen at the end of last week.

Investors appear hesitant to take decisive positions ahead of the Federal Reserve’s policy announcement on Wednesday. While the central bank is broadly expected to leave interest rates unchanged, markets will closely scrutinize its statement for any hints about the future direction of monetary policy.

Corporate earnings are also set to play a major role in the coming sessions, with results due from several heavyweight companies including Meta Platforms (NASDAQ:META), Microsoft (NASDAQ:MSFT), Tesla (NASDAQ:TSLA) and Apple (NASDAQ:AAPL).

Geopolitical developments remain a key source of uncertainty. President Donald Trump has warned he may impose a 100% tariff on imports from Canada in response to a potential trade agreement between Ottawa and Beijing. Canadian Prime Minister Mark Carney responded by saying his government has no intention of pursuing such a deal.

At the same time, concerns are growing about another possible U.S. government shutdown. A group of Democratic senators has threatened to block a spending bill if it includes funding for the Department of Homeland Security, following the fatal shooting of a U.S. citizen by federal immigration agents in Minneapolis over the weekend.

After posting strong gains earlier in the week, U.S. equity markets delivered a split performance on Friday. The Dow Jones Industrial Average retreated, while the Nasdaq continued its advance, notching its third straight daily gain.

The Dow closed down 285.30 points, or 0.6%, at 49,098.71. The S&P 500 edged higher by 2.26 points to 6,915.61, while the Nasdaq climbed 65.22 points, or 0.3%, to finish at 23,501.24.

For the holiday-shortened week, all three major indexes ended lower. The Nasdaq slipped 0.1%, while the S&P 500 and the Dow fell by 0.4% and 0.5%, respectively.

Market volatility on Friday reflected shifting geopolitical concerns. Earlier worries over Greenland eased, only to be replaced by renewed anxiety about a possible escalation between the United States and Iran.

After ruling out the use of force to acquire Greenland and easing tariff threats toward Europe, Trump appeared to refocus on Iran. Speaking to reporters aboard Air Force One on Thursday, he said a U.S. “armada” was heading toward the Middle East.

“We’re watching Iran,” Trump said. “You know we have a lot of ships going in that direction just in case. We have a big flotilla going in that direction and we’ll see what happens.”

Previously, Trump had stepped back from threats of military action against Iran tied to its response to widespread protests.

On the economic front, fresh data pointed to improving consumer confidence. The University of Michigan revised its January consumer sentiment index higher to 56.4 from a preliminary reading of 54.0, exceeding expectations and rising above December’s level of 52.9.

Sector performance was mixed. Software stocks led gains, lifting the Dow Jones U.S. Software Index by 2.2%. Shares of gold miners also advanced alongside a continued surge in gold prices, with the NYSE Arca Gold Bugs Index up 1.5%.

Meanwhile, computer hardware stocks lagged sharply, dragging the NYSE Arca Computer Hardware Index down 2.9%. Banking and housing shares also weakened, with the KBW Bank Index down 2.2% and the Philadelphia Housing Sector Index off 1.6%.

U.S. equity futures are indicating a modestly weaker start to Friday’s session, as markets appear set to pause following a sharp two-day rebound that erased much of the losses suffered earlier in the week.

After the recent rally, some investors are opting to lock in gains, particularly after the bounce largely offset Tuesday’s steep decline. The advance was fueled by easing concerns around President Donald Trump’s plans for Greenland, after he ruled out the use of military force and softened his tone on potential tariffs against European countries.

That relief may be short-lived, however, as geopolitical uncertainty resurfaced following fresh comments from Trump regarding Iran. Speaking to reporters aboard Air Force One on Thursday, the president said a U.S. “armada” was moving toward the Middle East.

“We’re watching Iran,” Trump said. “You know we have a lot of ships going in that direction just in case. We have a big flotilla going in that direction and we’ll see what happens.”

Trump had previously stepped back from threatening military strikes against Iran amid its crackdown on nationwide protests, but the renewed rhetoric has unsettled market sentiment.

Adding to the early pressure, Intel (INTC) shares slid nearly 13% in premarket trading. The chipmaker came under heavy selling after posting better-than-expected fourth-quarter earnings while issuing weaker-than-anticipated guidance for the current quarter.

On Thursday, Wall Street extended its rebound, with stocks closing mostly higher and building on Wednesday’s strong gains. The advance helped further neutralize Tuesday’s selloff, pushing the Dow into positive territory for the week.

While the major indices finished below their session highs, gains remained solid across the board. The Dow Jones Industrial Average rose 306.78 points, or 0.6%, to 49,384.01. The Nasdaq Composite advanced 211.20 points, or 0.9%, to 23,436.02, and the S&P 500 climbed 37.73 points, or 0.6%, to end at 6,913.35.

Markets have been supported by diminishing tensions tied to Trump’s Greenland ambitions. On Wednesday, the president publicly ruled out military action and later said he had reached the “framework” of an agreement over the Arctic territory.

Following that “framework” arrangement with NATO Secretary General Mark Rutte, Trump retreated from earlier threats to impose sanctions on European nations opposing his plans.

Some analysts see the recent surge in equities as a revival of the so-called “TACO trade,” shorthand for “Trump Always Chickens Out,” a term used to describe a pattern of market-rattling threats followed by policy reversals.

“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.”

On the economic front, data from the U.S. Labor Department showed a small increase in initial jobless claims for the week ended January 17. Claims edged up to 200,000, rising by 1,000 from the prior week’s revised reading of 199,000.

Economists had expected claims to climb to 205,000 from the previously reported 198,000.

Meanwhile, separate figures from the Commerce Department indicated that consumer prices rose in November broadly in line with economists’ forecasts.

Sector moves were mixed in Thursday’s session. Gold-related stocks surged as bullion prices jumped, with the NYSE Arca Gold Bugs Index gaining 4.4% to a record close. Telecom stocks also performed strongly, as the NYSE Arca North American Telecom Index advanced 2.1% to a new high.

Technology-linked sectors including software, networking and biotechnology supported the Nasdaq’s outperformance, while real estate and housing stocks lagged.

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.