Key Points

• Amazon-led Tech Slide Deepens: Amazon’s earnings miss and $200B capex forecast drove an 11% drop in its stock, accelerating a tech-sector sell-off that pushed the Nasdaq toward its worst week since April.
• Stellantis Sinks on $26B EV Overhaul Charge: Shares plunged 20% after the automaker revealed a €22B write-down linked to its EV transition missteps and suspended its dividend amid a broader strategic reset.
• AI Disruption Hammers Software Stocks: New AI tools from Anthropic triggered a 20% YTD drop in the software sector, with investors re-evaluating long-term viability of SaaS models amid rising automation fears.
• India Eyes $80B Boeing Deal in U.S. Trade Pivot: India is poised to finalize a massive aircraft purchase and deepen commercial ties with the U.S., signaling a strategic trade realignment amid global economic shifts.

February Economic Calendar

Feb 6 – RBI Interest Rate Decision: The Reserve Bank of India’s policy decision will influence emerging market currencies and capital flows, given India’s role in global growth.

Feb 6 – U.S. Employment Report (Delayed): The January U.S. jobs report, delayed from earlier in the week, will be a key read on economic momentum, labour conditions, and potential Fed policy direction.

Feb 7 – Trade Balance & Retail Sales (Dec): Key U.S. and global trade/consumption indicators will impact growth expectations and currency valuations.

Feb 7 – German Factory Orders (Dec): German industrial activity data will be watched for signs of Eurozone manufacturing health in the context of slowing growth.

Feb 8 – Foreign Reserves (Jan): Emerging markets reserve data may influence perceptions of global liquidity and currency stability.

Tech Rout Deepens as Amazon Miss Spurs Market Sell-Off

U.S. equity futures extended declines early Friday after Amazon’s earnings miss triggered a fresh wave of tech-sector weakness. The e-commerce giant’s shares fell 11% after narrowly missing EPS estimates and projecting $200 billion in 2026 capital expenditures, deepening pressure on the Nasdaq, which is on track for its worst week since April’s tariff-driven slide.

Software stocks continued to underperform, with the IGV ETF dropping over 11% this week—its steepest weekly loss since 2008—amid investor unease over AI disruption. Broader indices also retreated, with the S&P 500 and Dow shedding 1.2% each, while Bitcoin and silver slid in a broader risk-off move. Reddit bucked the trend, rising 4% on strong earnings and a $1 billion buyback.

Stellantis Shares Plunge on $26 Billion Transition Charge

Stellantis tumbled 20% in European trading after announcing a €22 billion ($26 billion) charge tied to its accelerated shift toward electric and hybrid vehicles. The automaker cited misjudging the pace of the energy transition and poor past execution as key factors behind the write-down, which led to a forecasted 2025 net loss, suspension of its 2026 dividend, and plans to raise €5 billion via hybrid bonds.

Despite reaffirming U.S. investment plans and job creation, the move underscores mounting costs and strategic recalibrations across the auto sector as legacy players adapt to changing demand. Shares remain under prolonged pressure, down over 13% year-to-date.

AI Fears Trigger Sharp Software Sell-Off Amid Sector Repricing

The software sector came under renewed pressure this week after Anthropic unveiled AI tools designed to automate key professional workflows, prompting investor concern over the long-term viability of traditional SaaS business models.

The S&P 500 Software & Services Index dropped over 4% Thursday, now down 20% year-to-date, with steep losses in names like Salesforce, Thomson Reuters, and LegalZoom. While tech leaders like Nvidia’s Jensen Huang dismissed fears as “illogical,” analysts remain split—some warning of sustained pricing and margin pressure as AI integration accelerates.

Amid the volatility, firms with deeply embedded enterprise functions, such as Oracle and ServiceNow, are seen as more resilient in the evolving AI landscape.

India Signals $80 Billion Boeing Purchase Amid New U.S. Trade Pact

India is preparing to place aircraft orders worth up to $80 billion with Boeing as part of a broader U.S.-India trade agreement expected to be finalized in the coming days, according to Commerce Minister Piyush Goyal.

The deal, which includes tariff cuts and expanded access to U.S. goods, marks a strategic pivot by New Delhi to deepen commercial ties with Washington amid shifting global alliances. While the Indian government has not confirmed all details announced by President Trump—such as zero tariffs and a $500 billion import commitment—analysts view the aircraft purchase as a tangible step in aligning trade priorities and boosting defense and aviation cooperation.

Conclusion

This week’s market developments reflect a growing divergence in investor confidence as macro shifts and sector-specific disruptions reshape risk dynamics. Tech earnings, led by Amazon, have intensified pressure on high-growth equities, while Stellantis’ strategic reset underscores the cost of misjudging transition timelines.

Meanwhile, the software sector faces renewed scrutiny as AI innovation challenges legacy business models. On the global front, India’s prospective $80 billion Boeing deal signals deepening U.S. trade ties. As markets navigate rising volatility and structural change, investors are recalibrating expectations, favoring resilient balance sheets, credible growth strategies, and geopolitical alignment as key drivers of long-term performance.

Investment Insights

• Tech Selectivity Is Key: The sharp sell-off in Amazon and broader tech highlights the need for disciplined exposure, favoring firms with earnings visibility and balanced capex strategies.
• EV Transition Risk Is Rising: Stellantis’ write-down signals that legacy automakers face execution and cost risks in energy transition timelines—investors should prioritize those with adaptable, phased strategies.
• AI Impact Will Be Uneven: While AI adoption disrupts traditional SaaS models, firms with embedded enterprise roles and deep data integration may retain durable value.
• Geopolitical Trade Shifts Matter: India’s alignment with U.S. supply chains offers opportunities in aerospace, defense, and export-linked sectors amid evolving global trade dynamics.

Key Points

• U.S. Markets: U.S. equity futures rebounded as investors digested earnings results and signs of stabilisation after a technology-led sell-off, with AI-related capital spending plans helping to support sentiment.
• Corporate Earnings: Alphabet’s results kept investor focus on the sustainability of AI-driven growth, as strong cloud and advertising momentum balanced concerns around rising capital expenditure and valuation.
• Asia Equities: Sony’s stronger-than-expected profit and raised outlook highlighted the benefits of diversification, even as higher memory costs and softer hardware sales weighed on parts of the technology sector.
• Energy Markets: Oil prices eased as upcoming U.S.–Iran talks reduced near-term geopolitical risk, though markets continue to price in potential supply disruptions given persistent regional tensions.

February Economic Calendar

U.S. Futures Rebound as Earnings Refocus Attention on AI Spending

U.S. equity futures advanced as investors digested fresh corporate earnings and signs of stabilisation after a technology-led sell-off earlier in the week. Futures linked to the S&P 500 and Nasdaq 100 rose modestly, while the Dow Jones Industrial Average was little changed, following a session in which weakness in software stocks weighed on headline indexes but strength in cyclicals lifted the Dow and the equal-weighted S&P 500.

Shares of Alphabet edged lower after earnings, though its plan to sharply increase artificial intelligence investment and target up to $185 billion in 2026 capital spending supported sentiment across the AI supply chain, lifting names such as Nvidia and Broadcom. The earnings backdrop was tempered by continued caution around parts of the technology sector, with Qualcomm falling sharply on a weaker outlook tied to memory shortages, while comments from Federal Reserve Governor Lisa Cook that progress on inflation stalled in 2025 reinforced uncertainty around the policy outlook ahead of key earnings and U.S. jobless claims data.

Alphabet Earnings in Focus as AI Momentum Shapes Outlook

Investors are closely watching upcoming earnings from Alphabet, as the company’s accelerating push into artificial intelligence continues to drive both performance and valuation debate. Alphabet shares are up more than 8% year to date and roughly 64% over the past 12 months, supported by strong growth in Google Cloud, rising adoption of its Gemini AI models, and expanding demand for AI infrastructure.

Analysts expect around 20% earnings growth for the quarter and remain broadly constructive on the outlook, citing improving search monetization, robust cloud backlogs, and optional upside from businesses such as Waymo. While consensus ratings skew bullish, some caution has emerged around valuation, leaving markets focused on management commentary around AI investment, advertising trends, and partnerships—particularly relative to peers such as Meta Platforms and potential collaboration with Apple—as key drivers of near-term sentiment.

Sony Lifts Outlook as Profit Beats Expectations Despite Cost Pressures

Sony Group reported a stronger-than-expected December quarter, with operating profit rising 22% year on year, supported by favorable foreign exchange movements and solid performance in its music and imaging businesses, prompting the company to raise its full-year outlook. Revenue edged higher to ¥3.71 trillion, while operating profit reached ¥515 billion, comfortably above expectations, leading Sony to lift its full-year operating profit forecast to ¥1.54 trillion and raise its revenue projection.

Results from the core gaming division softened as PlayStation hardware sales slowed, highlighting growing margin pressure from rising component costs, particularly DRAM, where prices are surging amid strong demand from artificial intelligence and data centers. However, robust growth in music, driven by live events and streaming, alongside strong momentum in imaging and sensing solutions, helped offset these headwinds and reinforced confidence in Sony’s diversified earnings base.

Oil Prices Ease as U.S.–Iran Talks Temper Near-Term Risk Premium

Oil prices fell in volatile trading as the United States and Iran agreed to hold talks in Oman, easing immediate fears of escalation in the Middle East while underscoring the fragility of the diplomatic backdrop. U.S. crude slipped about 1.4% to around $64 a barrel, while Brent crude declined a similar amount, reversing part of a recent risk-driven rally.

Markets reacted to the prospect of de-escalation even as disagreements persist over the scope of negotiations, with analysts cautioning that sentiment could shift quickly if talks stall or tensions re-emerge. Despite the pullback, underlying risks remain elevated, given the strategic importance of the Strait of Hormuz—through which roughly one-fifth of global oil supply flows—and positioning data suggest investors continue to price in upside risks should geopolitical frictions intensify again.

Conclusion

Market activity reflects a cautious but selective environment as investors balance earnings momentum against macroeconomic and geopolitical uncertainties. In equities, renewed focus on corporate fundamentals and artificial intelligence investment is helping stabilize sentiment following recent technology-led volatility. Strong results from diversified global companies underscore the value of balanced revenue streams amid rising input costs.

At the same time, energy markets remain highly sensitive to geopolitical developments, with oil prices reacting swiftly to shifting expectations around Middle East diplomacy. Overall, the current backdrop favors disciplined positioning, close attention to earnings quality, and diversification across regions and asset classes as markets navigate a phase of elevated volatility and uneven growth signals.

Investment Insights

• Equities: Recent market moves point to a more selective equity environment, where earnings visibility, balance-sheet strength, and exposure to durable AI investment cycles are increasingly differentiating performance.
• Technology & AI: Strong spending commitments from large-cap technology leaders support long-term growth in AI infrastructure, though elevated capital expenditure and valuation levels warrant a disciplined approach.
• Global Diversification: Sony’s results highlight the benefits of diversified revenue streams across regions and business lines, particularly as cost pressures rise in hardware-related segments.
• Energy & Geopolitics: Oil’s sensitivity to U.S.–Iran developments underscores the need to manage energy exposure carefully, as geopolitical risk remains a key driver of near-term price volatility.

U.S. Markets

U.S. equity futures steadied after a sharp technology-led sell-off, as investors grew more selective amid stretched valuations and a heavy earnings calendar, keeping near-term market sentiment cautious.

Asia & Commodities

Asian equity markets largely tracked Wall Street losses driven by weakness in technology stocks, while gold surged past $5,000 an ounce, reflecting increased demand for defensive assets amid rising volatility.

Digital Assets

Bitcoin fell to its lowest level since late 2024 as investors rotated out of risk-sensitive assets amid geopolitical uncertainty, though industry participants continue to point to resilient long-term adoption trends.

Private Markets

Private credit and alternative asset manager stocks dropped sharply on concerns that AI-driven disruption in the software sector could raise credit risks, highlighting investor sensitivity to sector concentration within private markets.

February Economic Calendar

• Feb 5 – Bank of England Monetary Policy Meeting: The BoE is expected to hold rates, with markets focused on guidance for future easing amid slowing wage growth and mixed inflation pressures.
• Feb 6 – U.S. January Employment Report: A critical update on labor market conditions that could sway Fed expectations on rate cuts and economic momentum.
• Feb 6 – Earnings Heavyweights (U.S.): Major U.S. companies continue reporting, influencing equity sector performance and sentiment.

U.S. Futures Steady as Tech Weakness Weighs on Markets

U.S. equity futures were little changed after a sharp rotation out of technology stocks dragged major indexes lower in the prior session, highlighting growing investor sensitivity to valuations and earnings outlooks. Futures linked to the S&P 500 and Nasdaq 100 hovered near flat levels, while the Dow Jones Industrial Average edged higher following its recent record high. The previous session saw the Nasdaq Composite fall 1.4% as large-cap technology names including Nvidia and Microsoft declined more than 2%, making technology the weakest sector.

After-hours trading added to the cautious tone, with Chipotle sliding nearly 6% on softer traffic trends and Advanced Micro Devices dropping sharply after an underwhelming outlook. Investors appear increasingly selective as stretched valuations meet a heavy earnings calendar, with results from Alphabet and Amazon due later this week, setting the stage for further near-term volatility.

Asia Shares Slide on Tech Pullback as Gold Breaks Above $5,000

Asia-Pacific markets mostly declined as the technology-led sell-off on Wall Street weighed on regional sentiment, while investors continued to rotate toward defensive assets, lifting gold to fresh record highs above $5,000 an ounce. Japan’s Nikkei 225 fell 1.2%, pressured by sharp losses in semiconductor and gaming stocks, while Hong Kong’s Hang Seng Index and China’s CSI 300 edged lower. In contrast, Australia’s S&P/ASX 200 and South Korea’s Kospi posted modest gains, reflecting more resilient domestic positioning.

The cautious tone followed a weak U.S. session in which the S&P 500 and Nasdaq Composite retreated amid broad declines across major technology names, reinforcing investor concerns over stretched valuations. Meanwhile, spot gold extended its advance to around $5,002 per ounce, underscoring rising demand for perceived safe assets as equity volatility persists.

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.

Private Credit Stocks Sink on AI-Driven Software Concerns

Shares of publicly listed private credit and alternative asset managers fell sharply as investors reassessed exposure to the software sector amid concerns that artificial intelligence could disrupt traditional business models and credit quality. Stocks including Blue Owl, TPG, Ares Management and KKR declined by double digits, while Apollo Global Management and BlackRock also posted notable losses.

The sell-off follows a steep downturn in listed software stocks, with the iShares Software ETF down about 20% year to date, as investors worry that AI adoption could pressure margins and growth. Analysts estimate that private credit portfolios have significantly higher exposure to software-related risk than the high-yield bond market, raising concerns about potential defaults and redemptions if disruption accelerates.

While the repricing reflects heightened risk awareness rather than systemic stress, it underscores growing investor scrutiny of sector concentration within private markets as AI-driven change reshapes parts of the technology landscape.

Conclusion

Recent market moves underscore a broader shift toward caution as investors reassess risk across equities, digital assets, and private markets. Technology stocks remain a key source of volatility, driving pullbacks in U.S. and Asian equities, while concerns around AI-driven disruption are prompting renewed scrutiny of sector concentration, particularly in private credit.

At the same time, elevated geopolitical uncertainty and policy ambiguity have weighed on cryptocurrencies, reinforcing their sensitivity to global risk sentiment. Against this backdrop, the surge in gold prices highlights a growing demand for defensive positioning, suggesting portfolios are increasingly balancing growth exposure with capital preservation as markets navigate a more selective and valuation-conscious phase.

Investment Insights

• Rotate, don’t retreat: Recent market moves point to selective rotation rather than broad risk aversion, favoring companies and sectors with resilient earnings, pricing power, and balance-sheet strength over higher-valuation growth names.
• Reassess technology exposure: AI-driven disruption is creating clear winners and losers across software and private markets, reinforcing the need to evaluate sector concentration and credit quality, particularly in private credit portfolios.
• Manage volatility across asset classes: Continued swings in equities and digital assets highlight the importance of diversification and risk controls, while elevated gold prices signal investor demand for defensive hedges amid macro and geopolitical uncertainty.

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.

Key Points

• Risk assets retreat at month start: U.S. equity futures weakened as sharp sell-offs in silver, gold and bitcoin signaled a broader risk-off shift, with investors bracing for major tech earnings and the U.S. jobs report.
• Precious metals unwind crowded trades: Gold and silver extended steep losses after last week’s historic plunge, reflecting profit-taking, a firmer dollar and renewed uncertainty around future Federal Reserve leadership and policy direction.
• Fed leadership transition raises uncertainty: President Trump’s nomination of Kevin Warsh as the next Federal Reserve chair has intensified debate over monetary policy independence, strengthening the dollar and adding volatility across rates, commodities and equities.
• Asia bears the brunt of volatility: Asian markets fell sharply, led by South Korea where a steep equity sell-off triggered a trading halt, as investors reacted to global risk aversion despite signs of stabilizing Chinese factory activity.

February Economic Calendar

Markets Open February Under Pressure as Risk Assets Retreat

U.S. equity futures fell at the start of February as investors reduced risk exposure following sharp sell-offs across alternative assets and precious metals. S&P 500 and Nasdaq futures led declines, pressured by weakness in bitcoin — which dropped below $80,000 for the first time since April — and a historic plunge in silver, which suffered its worst one-day fall since 1980. Gold also retreated sharply, signaling broader profit-taking after an extended rally.

Attention has shifted to the artificial intelligence sector after reports that Nvidia’s proposed $100 billion investment in OpenAI has stalled, raising questions about the pace and structure of AI capital deployment. Investors now turn to a heavy earnings slate, including major technology names, and the upcoming U.S. jobs report for clarity on growth momentum and policy expectations.

Precious Metals Correct Sharply After Record Rally

Gold and silver extended their sharp sell-off, deepening losses after last week’s historic plunge as a stronger U.S. dollar and profit-taking reversed momentum from a record-setting rally. Spot gold fell around 5% to near $4,611 an ounce after dropping almost 10% on Friday, while silver slid more than 10% following its worst one-day decline since 1980.

The pullback reflects a rapid reassessment of interest-rate expectations and Federal Reserve leadership after President Donald Trump nominated Kevin Warsh as the next Fed chair, reinforcing dollar strength and raising the opportunity cost of holding non-yielding assets. Analysts characterize the move as a violent but classic correction after an extraordinary run, with longer-term bullish views on bullion largely intact despite heightened near-term volatility.

Trump Names Kevin Warsh as Next Federal Reserve Chair

President Donald Trump said he will nominate former Federal Reserve governor Kevin Warsh to succeed Jerome Powell as chair of the U.S. central bank, ending months of speculation over the Fed’s future leadership. If confirmed by the Senate, Warsh would take over when Powell’s term expires in May, marking a significant shift after a period of tension between the White House and the Fed over interest rate policy.

Warsh, who served on the Fed’s board from 2006 to 2011 and represented the central bank at the G20, is viewed as more inclined toward tighter monetary discipline, a stance that has already influenced market expectations. His nomination introduces fresh uncertainty around the policy outlook, with investors closely watching the confirmation process and its implications for rate cuts, dollar strength, and broader financial conditions.

Asia Markets Slide as Korea Triggers Circuit Breaker, Metals Rout Deepens

Asia-Pacific markets opened February under pressure, led by a sharp sell-off in South Korea that saw the Kospi fall more than 4% and Kospi 200 futures drop up to 5%, triggering a sidecar trading halt. Losses were driven by heavy selling in index heavyweights Samsung Electronics and SK Hynix, reflecting broader risk aversion after last week’s historic plunge in gold and silver.

Hong Kong and mainland China equities also declined, while Japan was a rare bright spot with modest gains. Investors are weighing resilient Chinese factory activity in January against tightening global financial conditions, falling cryptocurrencies and renewed volatility in commodities, underscoring fragile risk sentiment as global markets enter the new month.

Conclusion

Global markets enter February on a more cautious footing as a sharp correction in precious metals and digital assets highlights the fragility of recent risk appetite. Equity investors are balancing strong underlying earnings trends against renewed uncertainty surrounding U.S. monetary policy following the nomination of a new Federal Reserve chair.

Volatility has been most pronounced in Asia, where export-oriented and technology-heavy markets remain sensitive to shifts in global liquidity and sentiment. While economic data point to pockets of resilience, the near-term outlook favors selectivity, disciplined risk management and close monitoring of policy signals as markets adjust to a more complex macro backdrop.

Investment Insights

• Expect higher volatility near term: The sharp reversal in gold, silver and bitcoin suggests crowded trades are unwinding, reinforcing the case for tighter risk controls and diversified exposure.
• Monetary policy clarity is critical: Markets are recalibrating expectations around a potentially more hawkish Federal Reserve under new leadership, which could support the dollar and pressure rate-sensitive assets.
• Equities favor earnings resilience over narratives: Strong aggregate earnings contrast with selective post-results sell-offs, underscoring the importance of balance-sheet strength and cash-flow visibility.
• Asia remains policy- and flow-driven: Recent equity declines highlight sensitivity to global liquidity and commodities, but selective opportunities persist in markets benefiting from improving manufacturing momentum.

Key Points

• U.S. markets pull back on policy uncertainty: Equity futures edged lower as investors digested a second consecutive S&P 500 decline, heightened by uncertainty surrounding the upcoming announcement of a new Federal Reserve chair and its implications for monetary policy.
• Tech earnings drive volatility: Mixed results from major technology companies, including a sharp post-earnings drop in Microsoft despite strong AI spending, reinforced concerns about margin pressure and the pace of cloud growth.
• Market leadership continues to broaden: While megacap tech faced scrutiny, relative strength in other sectors and resilience in the Dow point to a healthier, more diversified equity rally in 2026.
• Political risk back in focus: The rising probability of a U.S. government shutdown added another layer of near-term risk, keeping investors cautious despite generally supportive economic and earnings trends.

January Economic Calendar

U.S. Futures Slip as Fed Leadership Uncertainty and Tech Earnings Weigh

U.S. equity futures moved lower after the S&P 500 posted a second straight decline, reflecting renewed caution around Federal Reserve leadership uncertainty and mixed signals from major technology earnings. Futures on the S&P 500, Nasdaq 100 and Dow all fell about 0.3%, while regular-session trading saw losses in the Nasdaq offset by modest gains in the Dow.

Investor focus remains on President Donald Trump’s announcement of a new Fed chair, adding sensitivity to policy expectations, as well as earnings-driven volatility within technology stocks. Signs of slowing cloud growth and scrutiny around AI monetization have reinforced a gradual broadening of market leadership beyond megacap tech, even as overall weekly performance remains positive.

U.S. Firms Target Critical Metal Supply Chain Vulnerabilities

A growing effort to reduce U.S. dependence on China and Russia for critical military materials is drawing attention to niche domestic suppliers. LightPath Technologies, a Florida-based optics and photonics firm, is developing infrared imaging components that eliminate the need for germanium – a rare earth metal largely controlled by China and Russia.

China produces roughly 67% of global germanium, while China and Russia together account for about 90% of global germanium and gallium output, both vital for military imaging, communications and solar applications. Export restrictions imposed by Beijing have sharply curtailed U.S. imports, accelerating demand for alternatives.

LightPath’s proprietary “BlackDiamond” glass, licensed from the U.S. Naval Research Laboratory, offers a lighter, cheaper, and domestically sourced substitute, positioning the company within defense, drone manufacturing, and industrial inspection supply chains.

Fed Leadership Uncertainty Adds to Policy Sensitivity

Markets are closely monitoring signals from Washington after President Donald Trump said he will announce a replacement for Federal Reserve Chair Jerome Powell. While policy continuity is broadly expected in the near term, uncertainty around future Fed leadership has increased investor sensitivity to institutional independence, inflation credibility, and the longer-term policy outlook.

Any indication of a more accommodative or politically influenced stance could have material implications for rates, currencies, and risk assets.

Asia-Pacific Markets Mixed as Policy and Trade Risks Persist

Asia-Pacific equities traded unevenly as investors weighed improving risk sentiment against lingering trade and policy uncertainty. Japanese and South Korean markets showed resilience, while broader regional performance reflected caution around global demand and U.S. policy developments.

Attention remains on fiscal negotiations in Washington, trade signals from the White House, and the implications for export-oriented Asian economies navigating an increasingly fragmented global trade environment.

Conclusion

Policy uncertainty warrants caution: Prospects of a change in Federal Reserve leadership and ongoing fiscal negotiations in Washington increase short-term volatility, reinforcing the need for prudent risk management.

Earnings dispersion is rising: Markets are rewarding companies with clear earnings visibility and disciplined capital allocation, while punishing weaker guidance, particularly within parts of the technology sector.

Broadening market leadership: Rotation into non-mega-cap sectors suggests healthier market structure and opportunities beyond headline index drivers.

Stay selective and diversified: A balanced approach across sectors and regions remains appropriate as macro resilience offsets elevated political and policy risks.

Investment Insights

• Policy uncertainty warrants caution: Prospects of a change in Federal Reserve leadership and ongoing fiscal negotiations in Washington increase short-term volatility, reinforcing the need for prudent risk management.
• Earnings dispersion is rising: Markets are rewarding companies with clear earnings visibility and disciplined capital allocation, while punishing weaker guidance, particularly within parts of the technology sector.
• Broadening market leadership: Rotation into non-mega-cap sectors suggests healthier market structure and opportunities beyond headline index drivers.
• Stay selective and diversified: A balanced approach across sectors and regions remains appropriate as macro resilience offsets elevated political and policy risks.

Key Points

• U.S. Markets Consolidate Near Highs: Equities remain supported by earnings momentum and steady liquidity conditions, though investors are increasingly sensitive to policy guidance and valuation risks.
• Europe Recalibrates China Strategy: The UK’s renewed engagement with Beijing highlights a pragmatic approach to trade and investment amid global fragmentation.
• European Banks Regain Footing: Deutsche Bank’s results reflect a broader stabilization in European financials as deal activity and capital markets recover.
• Precious Metals Signal Macro Unease: Record gold and silver prices point to structural demand for hedges against fiscal, currency, and geopolitical risk.

January Economic Calendar

Markets Steady as Investors Weigh Fed Outlook and Earnings Momentum

U.S. equity markets traded with a cautious tone as investors balanced optimism around corporate earnings with lingering policy and macro uncertainty. Major indexes held near recent highs, supported by resilient risk appetite and steady capital flows, even as market participants assessed signals from the Federal Reserve regarding the future path of interest rates. Attention remained focused on earnings quality and forward guidance, with investors increasingly selective amid elevated valuations. Treasury yields stabilized after recent volatility, while commodities continued to reflect demand for inflation hedges and geopolitical protection.

UK–China Engagement Signals Pragmatic Reset in Economic Relations

The United Kingdom is deepening its economic engagement with China as Prime Minister Keir Starmer leads a high-profile delegation of business leaders to Beijing. Talks with Chinese leadership are centered on trade, investment access, and strategic cooperation, highlighting Europe’s pragmatic approach to maintaining commercial ties despite geopolitical sensitivities. The visit reflects a broader trend of global powers recalibrating relationships with China, balancing national security considerations with economic necessity as global growth becomes more fragmented.

Deutsche Bank Posts Strong Finish to 2025 as Investment Banking Rebounds

Deutsche Bank reported a solid set of fourth-quarter results, capping a stronger 2025 driven by improved revenues and cost discipline. The lender benefited from a recovery in investment banking activity, resilient corporate financing demand, and stable performance across its wealth and asset management divisions. Management emphasized continued balance sheet strength and capital flexibility as Europe’s largest banks navigate a mixed economic outlook, higher funding costs, and evolving regulatory expectations.

Gold and Silver Extend Record Rally as Market Signals Structural Stress

Gold and silver prices pushed to fresh record highs, reflecting sustained demand for safe-haven assets amid geopolitical uncertainty, currency volatility, and concerns over long-term fiscal stability. Analysts note that tight physical supply, strong central bank buying, and rising investor demand are distorting traditional pricing signals, raising questions about market liquidity and price discovery. The continued surge underscores a broader shift toward real assets as confidence in fiat stability and policy coordination remains fragile.

Conclusion

Global markets are navigating a complex intersection of resilient earnings, shifting geopolitical alliances, and underlying macro stress. While U.S. equities continue to find support from corporate performance and steady monetary policy, investor behavior suggests growing caution beneath the surface. Europe’s renewed engagement with China and strengthening bank balance sheets point to selective regional opportunities, even as geopolitical risk remains elevated. Meanwhile, the relentless rise in precious metals highlights persistent concerns around currency stability, fiscal discipline, and long-term policy credibility. In this environment, disciplined positioning and diversification remain critical.

Investment Insights

• Favor Selectivity Over Broad Exposure: Elevated equity levels warrant a focus on earnings durability and balance sheet strength rather than index-level risk.
• Geopolitical Pragmatism Creates Opportunity: Europe’s engagement with China may support trade-linked sectors, but policy volatility remains a key risk factor.
• Financials Show Relative Value: Improving profitability and capital resilience in European banks offer selective upside as conditions normalize.
• Maintain Real-Asset Hedges: Persistent strength in gold and silver reinforces their role as strategic diversifiers amid policy and fiscal uncertainty.

Key Points

• U.S. equities steady ahead of Fed and Big Tech earnings: Markets are holding near record levels as investors balance expectations of a steady Federal Reserve with earnings from major technology leaders that will shape near-term sentiment.
• China accelerates AI model rollouts: Chinese technology firms are rapidly launching lower-cost, open-source AI models, intensifying competition with U.S. peers and signaling a strategic focus on scale, ecosystem integration and emerging-market adoption.
• UK–China engagement signals pragmatic reset: Prime Minister Keir Starmer’s high-level China visit with senior executives underscores renewed European efforts to secure trade and investment channels despite geopolitical and security sensitivities.
• EU–India trade deal reshapes global trade flows: The landmark free trade agreement positions Europe and India to reduce tariff barriers and diversify growth partners, while potentially increasing friction with the U.S. amid an already volatile global trade backdrop.

January Economic Calendar

Markets Hold Near Records Ahead of Fed and Big Tech Earnings

U.S. equity futures traded narrowly mixed as investors positioned for the Federal Reserve’s first policy decision of the year and a heavy slate of major technology earnings. In regular trading, the S&P 500 rose 0.4% to a fresh record close, while the Nasdaq Composite gained 0.9%, supported by strength in large-cap technology. The Dow Jones Industrial Average lagged, falling more than 400 points after a sharp drop in UnitedHealth shares.

Markets broadly expect the Federal Reserve to keep rates steady, with attention focused on Chair Jerome Powell’s guidance on the timing of potential easing later in 2026. Investor focus now shifts to earnings from Microsoft, Meta Platforms and Tesla, due Wednesday, followed by Apple on Thursday, which are expected to shape near-term market sentiment amid a softer U.S. dollar and resilient risk appetite.

China’s AI Firms Accelerate Model Releases as Global Competition Intensifies

Chinese technology companies are rapidly rolling out new artificial intelligence models, prioritizing speed, affordability and ecosystem integration as competition with U.S. rivals intensifies. Startups such as Moonshot AI and Z.ai have launched frequent model upgrades, while larger players including Alibaba and Baidu are leveraging open-source and low-cost strategies to drive adoption, particularly in emerging markets.

Rather than focusing solely on benchmark leadership against U.S. peers, Chinese firms are emphasizing user growth and embedding AI into existing platforms such as e-commerce, payments and messaging. This approach is helping accelerate usage and build ecosystems, even as questions remain about long-term monetization and technological parity with leading U.S. models.

UK Re-Engages China as Starmer Leads Business Delegation to Beijing

U.K. Prime Minister Keir Starmer has launched the first British leader visit to China in eight years, bringing a delegation of nearly 60 business and cultural organizations in a bid to reset economic ties amid heightened global tensions. The trip includes senior executives from HSBC, Airbus, AstraZeneca and GSK, underscoring London’s focus on trade, investment and strategic industries.

Starmer is scheduled to meet Chinese President Xi Jinping and Premier Li Qiang, with discussions spanning commercial cooperation and national security. The visit reflects renewed European engagement with Beijing as governments balance economic interests against geopolitical risk.

EU–India Trade Pact Raises Stakes for Global Trade Relations

A landmark free trade agreement between the European Union and India has shifted global trade dynamics, with attention now turning to how U.S. President Donald Trump will respond. Branded the “mother of all deals” by Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen, the pact aims to gradually eliminate most bilateral tariffs after nearly two decades of negotiations.

The agreement is widely viewed as a strategic hedge against unpredictable U.S. trade policy, particularly as Washington maintains elevated tariffs on EU and Indian exports. While U.S. officials have criticized the move, both Brussels and New Delhi frame the deal as a boost to competitiveness, market access and strategic autonomy amid rising geopolitical and trade uncertainty.

Conclusion

Global markets are navigating a delicate balance between policy uncertainty and structural opportunity. U.S. equities remain supported by resilient earnings expectations and a cautious Federal Reserve, even as investors remain alert to currency moves and geopolitical developments.

In parallel, Asia’s growing influence is evident through China’s accelerating push in artificial intelligence, renewed diplomatic engagement from Europe, and landmark trade realignments such as the EU–India agreement. Together, these dynamics underscore a gradual reordering of global capital flows and technology leadership.

For investors, the environment favors selectivity, diversification across regions, and a disciplined focus on long-term growth drivers amid persistent volatility.

Investment Insights

• U.S. assets face policy cross-currents: Record equity levels alongside a weaker dollar and an on-hold Fed suggest supportive financial conditions, but heightened sensitivity to policy signals and earnings guidance argues for selective exposure rather than broad beta.
• China’s tech push is about scale, not headlines: Accelerating AI model rollouts emphasize ecosystem adoption and cost efficiency, favoring platforms with distribution and integration advantages over pure benchmark leaders.
• Geopolitics is reshaping capital flows: High-level diplomatic engagement with China and Asia’s growing market depth highlight a gradual diversification away from U.S.-centric exposure.
• Trade realignment creates regional winners: The EU–India free trade deal strengthens long-term growth prospects for export-oriented sectors in both regions, while increasing the risk of reactive U.S. trade measures.

Key Points

• U.S. Markets Steady Ahead of Earnings and Fed: U.S. equities opened a pivotal week on a firmer footing as investors positioned for heavy Big Tech earnings and the Federal Reserve’s policy decision, with sector moves reflecting sensitivity to both earnings guidance and policy headlines.
• China Profits Stabilize but Recovery Uneven: China’s industrial profits returned to modest growth in 2025 after three years of declines, helped by policy efforts to curb price wars, though weak domestic demand and sharp sector divergence highlight a fragile and uneven recovery.
• Asia Attracts Strong Global Capital Flows: Asian equity markets continued to draw robust international inflows, pushing regional benchmarks to record highs and fueling a surge in IPO and deal activity, as investors rotate toward growth opportunities outside the U.S.
• South Korea Hit by Renewed U.S. Tariff Threats: President Trump’s move to raise tariffs on South Korean autos and pharmaceuticals reignited trade uncertainty, pressuring Korean exporters and underscoring the ongoing geopolitical risk premium facing export-oriented Asian markets.

January Economic Calendar

Markets Steady as Earnings Season Intensifies

U.S. equity futures were little changed Monday night after stocks opened the week higher, as investors balanced a strong start to earnings season against rising policy and regulatory uncertainty. The S&P 500 gained 0.5% in the regular session, supported by advances in major technology stocks ahead of key results from Apple, Microsoft, Meta and Tesla, while futures remained flat heading into Tuesday. Sentiment was tempered by sharp after-hours declines in health insurers after the Trump administration proposed keeping Medicare Advantage payment increases near zero for 2027, well below market expectations. Attention now turns to a heavy earnings calendar, the Federal Reserve’s policy decision later this week, and fresh signals on tariffs, with investors increasingly focused on whether earnings momentum can offset political and macro risks.

China Profits Stabilize as Recovery Remains Uneven

China’s industrial profits rose 0.6% in 2025, ending three years of declines, as policy efforts to curb price wars and stronger overseas demand helped stabilize corporate earnings despite weak domestic consumption. December profits climbed 5.3% year-on-year, marking the strongest monthly gain since September, supported partly by pre-holiday production and improving factory activity. However, the recovery remains uneven, with manufacturing and utilities posting gains while mining and energy sectors saw sharp declines, highlighting persistent margin pressure and excess capacity. Analysts say the modest rebound underscores China’s reliance on policy support and exports, with fragile consumer demand and sector divergence likely to constrain a broader and more durable industrial recovery.

Asia Draws Global Capital as Equity and IPO Activity Accelerates

Asian equity markets are seeing a strong influx of global capital, driving record highs and a surge in deal-making across the region. The MSCI Asia Pacific Index has reached fresh peaks, building on gains of more than 25% in 2025, while benchmarks in Japan and South Korea have also hit all-time highs. Robust IPO activity, rising cross-border flows and renewed interest in technology and semiconductors are reinforcing investor confidence, particularly in markets such as China, India, Japan and South Korea. Bankers say investors are increasingly comfortable allocating capital amid geopolitical uncertainty, focusing instead on earnings momentum, policy support and Asia’s growing role in global growth and innovation.

South Korea Tariffs Rekindle Trade Uncertainty

U.S.–South Korea trade tensions resurfaced after President Donald Trump said tariffs on South Korean autos, pharmaceuticals and lumber would rise to 25% from 15%, citing delays in Seoul’s legislature approving a bilateral trade deal reached last year. The announcement weighed on Korean auto stocks, with Hyundai Motor and affiliates falling sharply before trimming losses, underscoring investor sensitivity to renewed policy risk. While South Korean officials said they had not received formal notice, the move highlights how trade disputes remain a live market variable. For investors, the episode reinforces the vulnerability of export-heavy sectors to abrupt shifts in U.S. trade policy and geopolitical leverage.

Conclusion

Global markets are navigating a complex mix of earnings optimism, shifting policy signals and renewed geopolitical frictions. U.S. equities remain supported by resilient corporate results and expectations of a steady Federal Reserve, even as trade and fiscal risks linger beneath the surface. In Asia, improving capital flows and renewed investor interest contrast with uneven economic fundamentals, particularly in China and export-dependent economies facing tariff uncertainty. Together, these dynamics point to a market environment where selective exposure, regional diversification and close monitoring of policy developments are increasingly critical for investors seeking to balance opportunity with risk in 2026.

Investment Insights

• Earnings resilience vs. policy risk: Solid U.S. corporate earnings are supporting equity markets, but elevated tariff uncertainty and political risk argue for selective exposure rather than broad beta positioning.
• Asia attracting global capital: Strong equity inflows and IPO activity across Asia highlight renewed investor confidence, favoring markets with clear growth drivers such as technology and advanced manufacturing.
• China recovery remains uneven: The modest rebound in industrial profits reflects policy support, but weak domestic demand and sector divergence suggest a cautious approach to China-linked assets.
• Trade-sensitive sectors face volatility: Rising U.S.–South Korea trade tensions underscore the need to manage exposure to export-heavy industries vulnerable to sudden policy shifts.

Key Points

• U.S. Export Policy Uncertainty: Export decisions on AI semiconductors remain a major swing factor for companies with China-linked tech revenue.
• Memory Supply Tightness: While upstream vendors benefit from pricing power, downstream players face margin compression amid extended chip shortages.
• Silver Hits $100, Gold Nears $5,000: Metals strength is driving miners into leadership roles, though risks rise if prices go parabolic.
• Private Markets Expand in Asia: Accelerated push into Asian private wealth is intensifying competition across managers and distributors.

January Economic Calendar

Trump Approves Nvidia H200 Exports to China

Policy signals around advanced AI chip exports continue to shift, keeping semiconductor supply chains—and China-facing revenue exposure—highly sensitive to Washington headlines. This is an “earnings + geopolitics” setup: a single licensing or oversight change can reprice multiples quickly.

Memory Chip Shortage Expected to Extend

Tight memory supply conditions point to continued pricing power for upstream vendors, but also margin pressure for hardware OEMs and hyperscalers depending on contract structure. Watch for second-order effects: capex timing changes, product launch delays, and substitution toward alternative configurations.

Mining Stocks Surge as Metals Rally

A broad move higher in metals is lifting miners and rekindling “supercycle” narratives, with the usual split between momentum-driven inflows and discipline-focused investors watching for parabolic price action. For portfolios, the key question is durability of demand (AI infrastructure, electrification) versus the speed of new supply response.

Blackstone Expands Asia Hiring

Large alternative managers are leaning harder into Asia private wealth distribution, aiming to channel HNW flows into private market strategies. This supports a longer-run theme: product proliferation (evergreen/semi-liquid), more advisor partnerships, and intensified competition for shelf space across regional banks and platforms.

Conclusion

Markets are being pulled by a familiar mix of policy risk, AI-driven capex cycles, and real-asset repricing, with private wealth distribution becoming an increasingly important transmission channel for alternatives into Asia.

Investment Insights

• Policy Risk is a Volatility Catalyst: Size positions to survive headline-driven gaps rather than relying on “base case” scenarios.
• Diversified Semiconductor Exposure: Favor a mix of compute, memory, and infrastructure exposure amid shifting export regulations.
• Disciplined Commodity Strategy: Distinguish structural demand from late-cycle momentum; use pullbacks to scale into positions.
• Distribution is Strategy in Alternatives: Firms with strong bank and platform relationships, and well-structured products, may scale faster.