Key Points

• U.S. equities rebound into February: Wall Street opened the new month on a stronger footing, supported by solid earnings from select AI and industrial names, even as crypto and precious metals volatility signaled lingering risk sensitivity.
• Precious metals stabilize after sharp correction: Gold and silver rebounded following a historic sell-off, with analysts viewing the move as a positioning reset rather than a reversal of longer-term structural demand drivers.
• Australia resumes monetary tightening: The Reserve Bank of Australia raised rates for the first time since late 2023 as inflation hit a six-quarter high, reinforcing a more hawkish stance and pushing back expectations of near-term easing.
• India assets rally on U.S. trade breakthrough: Indian equities and the rupee surged after the U.S. and India announced a long-awaited trade deal, sharply cutting tariffs and removing a key overhang on sentiment and growth expectations.

February Economic Calendar

U.S. Stocks Start February Firmly as Earnings Momentum Offsets Risk Jitters

U.S. equity futures edged higher Monday night after Wall Street opened February on a positive footing, supported by solid earnings and continued confidence in the artificial intelligence theme. The Dow jumped more than 500 points, while the S&P 500 and Nasdaq posted moderate gains as investors welcomed strong results and upbeat guidance from companies such as Palantir and Teradyne. Tech sentiment remained selective, however, with Nvidia sliding on reports its planned OpenAI investment has stalled.

Outside equities, risk appetite softened, with bitcoin hitting its lowest level since April and gold and silver extending recent losses. Attention now turns to a heavy earnings slate, with markets watching whether AI-driven growth can continue to justify valuations amid rising volatility.

Precious Metals Stabilize After Sharp Correction as Long-Term Drivers Reassert

Gold and silver rebounded on Tuesday following last week’s historic sell-off, with analysts framing the move as a positioning reset rather than a structural break in the bullish outlook. Gold rose more than 2%, recovering part of its near-10% plunge, while silver advanced modestly after suffering its worst one-day drop since 1980.

Strategists at Deutsche Bank and Barclays said investor intent toward precious metals remains largely intact, pointing to ongoing geopolitical uncertainty, reserve diversification and policy risks as supportive themes. While speculative excess amplified recent volatility—particularly in silver—analysts note that underlying industrial demand, including from solar and AI-linked infrastructure, continues to underpin the longer-term investment case.

Australia Resumes Tightening Cycle as Inflation Pressures Rebuild

Australia’s central bank raised its policy rate by 25 basis points to 3.85%, marking the Reserve Bank of Australia’s first hike since November 2023 as inflation climbed to a six-quarter high. The decision, which matched market expectations, reflected stronger-than-anticipated private demand, tightening labor market conditions and rising capacity pressures, according to the RBA.

Policymakers emphasized that inflationary momentum picked up materially in the second half of last year and signaled little appetite for near-term rate cuts. Australia’s economy grew 2.1% in the third quarter, its fastest pace in nearly two years, reinforcing the central bank’s meeting-by-meeting approach and keeping the door open to further tightening if price pressures persist.

India Markets Surge After U.S. Trade Deal Breakthrough

India’s benchmark Nifty 50 surged about 5% at the open, heading for its strongest session in nearly six years, after New Delhi and Washington announced a long-awaited trade agreement that sharply reduces U.S. tariffs on Indian exports. President Donald Trump said reciprocal tariffs on India would be cut to 18% from 25%, while India agreed to lower tariff and non-tariff barriers against the U.S. and curb purchases of Russian oil.

The deal exceeded market expectations and helped unwind months of investor caution that had weighed on Indian assets, driving a relief rally in equities and a 1% rebound in the rupee. Strategists said the agreement, alongside India’s recent EU trade pact, represents a meaningful external growth boost for 2026.

Conclusion

Global markets enter February navigating a complex mix of renewed risk appetite and policy recalibration. Equity sentiment has stabilized as earnings resilience and selective AI-led growth offset volatility in cryptocurrencies and commodities.

The sharp correction in precious metals appears to reflect technical repositioning rather than a breakdown in underlying demand, while central banks continue to diverge, with Australia signaling renewed inflation vigilance. Meanwhile, geopolitical and trade developments remain a powerful catalyst, highlighted by India’s tariff breakthrough with the U.S.

Together, these dynamics underscore a market environment driven by policy signals, earnings credibility and selective regional opportunities rather than broad-based risk-taking.

Investment Insights

• Favor selective equity exposure over broad risk-on trades: Earnings momentum and AI-linked capital spending continue to support equities, but dispersion is rising, rewarding companies with clear profit visibility rather than speculative growth narratives.
• View precious metals volatility as tactical, not structural: The sharp gold and silver correction reflects positioning and dollar dynamics; long-term allocation cases tied to geopolitical risk and reserve diversification remain intact.
• Watch central bank divergence closely: Australia’s rate hike contrasts with expected policy stability elsewhere, reinforcing the importance of regional rate differentials for currency and bond positioning.
• Trade policy shifts create asymmetric regional upside: The U.S.–India tariff deal materially improves India’s growth outlook, supporting Indian equities and the rupee after prolonged underperformance.