This Week
Wednesday’s Fed meeting will be the highlight of the week with no interest rate change expected, but focus will be on Chair Powell’s comments about the outlook for inflation, employment, and potential rate cuts in the coming months. The earnings season will hit its stride with major companies such as Tesla, Facebook, and Microsoft set to post earnings on Wednesday, and Apple declaring results on Thursday. Traders will also be watching the Middle East with the US widely expected to strike Iran in the coming days, while President Trump’s statements will continue to move the markets.
Stocks
FACEBOOK (META)
Facebook’s stock price surged 9.4% to hit its highest level so far this year amid improved market sentiment, as fears that the company could be targeted in a potential conflict between Europe and the US eased. Reports that Threads is about to roll out ads, which could provide a meaningful revenue stream for the company, also supported prices. A number of investment banks, including Wells Fargo and UBS, reaffirmed their positive assessments of the stock, expressing optimism that Meta’s pivot towards AI will continue to drive company growth. The company will post its results on January 28th.
AMD
AMD’s stock price jumped 12.9% and drew very close to a record high late in the week amid optimism in the chip industry and the company’s position within it. Disappointing Intel results triggered a rotation towards AMD, with the latter seen as a leaner company able to capture data center share without the support of the US administration. Reports at the end of the week that China has enabled the purchase of AI chips from NVIDIA lent hope that AMD could also be able to do the same. The company will report its earnings on February 3rd.
Commodities
Crude Oil
Crude oil prices pushed 4% higher to end the week close to a 10-day high despite rising geopolitical risks in the oil-rich Middle East. Late in the week, President Trump spoke of an armada approaching Iran, stoking fears of supply disruption with many traders believing the US will strike Iran in the coming days. In Kazakhstan, production interruptions last week also supported prices. There was also relief that potential tariffs between Europe and the US (and thus possible lower oil demand) were avoided.
Gold
Gold prices jumped 6.84% to post their best weekly performance for many months, as the precious metal hit another all-time high. Early in the week, US-EU tariff threats saw strong safe-haven demand. A falling dollar also made gold more affordable for foreign currency buyers. Late in the week, expectations grew of a conflict in the Middle East after Iran promised to hit US and other targets in the region if attacked by the US.
PLATINUM
Platinum prices soared 17.1% to test an all-time high by Friday’s close amid widespread gains among precious metals. A falling dollar also made metals more affordable for overseas buyers. Platinum’s ongoing gains in recent weeks have been chiefly caused by tight supply, due to underproduction by major exporter South Africa, but also due to strong industrial demand for vehicles, chemicals and hydrogen fuel cells.
GBP/USD
The GBP/USD jumped 1.82% higher after dollar weakness and sterling strength powered the pair to multi-month peaks. In the UK, higher-than-expected retail sales data undermined the case for early Bank of England rate cuts. The dollar was under pressure after trade fears eased and risk appetite shifted back to other instruments.
Recap
Last week, the S&P 500 declined 0.4%, the Nasdaq fell 0.1%, and the Dow Jones lost 0.5%.
US stock indices were highly volatile and fell amid geopolitical tensions, but recovered most of the losses from early in the week. Trades were spooked by US tariff threats against European countries over Greenland, but pared losses after a solution was found. In the earnings season, Netflix reported results above expectations. The US, Russia, and Ukraine took part in the first trilateral negotiations since the war began amid another push for a peace deal. Meanwhile, all eyes were on the Middle East as US warships moved towards the region.
Crude oil prices climbed to an almost ten-day high while natural gas prices surged to three-year highs amid freezing weather in the US. Gold and Silver prices again struck all-time highs as geopolitical uncertainty continued to lend support to safe havens. Platinum prices hit a record peak, and Palladium prices also climbed.