Intel closes 23% higher after Nvidia takes $5B stake
Global financial markets opened the week with a mix of confidence and caution. Wall Street’s record-setting rally, driven by technology stocks, contrasts with a surge in gold prices as investors brace for the Federal Reserve’s two-day meeting.
With markets nearly certain of a 25-basis-point rate cut, attention now turns to Fed Chair Jerome Powell’s tone on inflation, labor-market weakness, and tariff risks. The outcome will shape investor positioning across equities, commodities, and currencies.
Wall Street Momentum Meets Policy Uncertainty
US equities extended their upward momentum on Monday, with the S&P 500 and Nasdaq reaching fresh record highs. Optimism was fueled by strength in tech stocks and a tentative U.S.–China framework agreement over TikTok, suggesting that trade tensions may be cooling.
Despite the bullish backdrop, U.S. stock futures were flat on Tuesday morning, signaling investor hesitation ahead of Powell’s remarks. Markets are weighing whether the Fed will deliver not just a rate cut, but also a clear signal of its policy path into year-end.
- The S&P 500 and Nasdaq closed at record highs, extending a tech-led rally supported by easing trade tensions with China.
- US stock futures were little changed on Tuesday, reflecting investor caution ahead of the Fed’s highly anticipated policy announcement.
Global Markets: Asia Strengthens, Europe Falters
Asian equities continued to benefit from semiconductor momentum. South Korea’s Kospi and Japan’s Nikkei gained ground, while Chinese equities showed little direction. In Europe, broader markets opened weaker, though miners bucked the trend thanks to higher gold prices and improving trade sentiment.
- South Korea’s Kospi climbed 1.2% to a new record high, fueled by a 5.1% jump in SK Hynix as AI-driven chip demand accelerated.
- Japan’s Nikkei rose 0.3%, supported by semiconductor-linked gains that underscored ongoing global tech enthusiasm.
- Hong Kong’s Hang Seng edged 0.2% higher, while Shanghai’s Composite index remained flat, highlighting persistent investor caution over China’s domestic growth outlook.
- Europe’s Stoxx 600 slipped 0.2% in early trading, although miners such as Rio Tinto (+1.5%), Glencore (+1.2%), and Fresnillo (+3.6%) outperformed on stronger gold prices and trade optimism.
Safe-Haven Trade in Focus
The dollar’s weakness reinforced safe-haven flows into gold, while currency markets reflected shifting expectations for U.S. policy. Treasury yields edged higher, suggesting some investors still anticipate a firmer growth trajectory despite looming cuts.
- Gold futures surged to a record $3,731.90 per ounce before easing to $3,730.80, extending a historic rally as investors sought protection from dollar weakness and geopolitical risks.
- The US Dollar Index fell to a two-month low, driven by expectations of monetary easing, while sterling touched a two-month high against the greenback.
- The yen strengthened against the dollar, signaling continued demand for traditional safe-haven currencies.
- Bitcoin rose 0.4%, reflecting modest diversification into digital assets alongside traditional safe havens.
Energy Markets Hold in Narrow Range
Oil prices slipped but stayed within tight ranges, with investors awaiting clarity on whether Western sanctions would meaningfully restrict Russian supplies.
- Brent crude fell 0.5% to $67.12 a barrel, remaining range-bound as supply risks from potential sanctions competed with concerns about global demand.
- WTI crude slipped 0.5% to $63.02, underscoring the balance between geopolitical uncertainty and weak consumption signals.
Key Market Metrics
|
Asset/Index |
Latest Move |
Commentary |
|
|
S&P 500 / Nasdaq |
Fresh record highs |
Tech-driven rally supported by easing trade tensions |
|
|
Kospi (South Korea) |
+1.2% |
Record high as SK Hynix surged 5.1% on AI-related chip demand |
|
|
Nikkei (Japan) |
+0.3% |
Gains concentrated in semiconductor-related names |
|
|
Stoxx 600 (Europe) |
-0.2% |
Broad weakness offset by strong mining-sector performance |
|
|
Gold Futures |
$3,731.90 (record) |
Safe-haven demand rises amid dollar weakness and central bank buying |
|
|
Brent Crude |
$67.12 (-0.5%) |
Sanction uncertainty keeps oil trading in narrow range |
|
|
WTI Crude |
$63.02 (-0.5%) |
Reflects tug-of-war between supply risks and demand worries |
|
|
U.S. Dollar Index |
Two-month low |
Weaker on rate-cut bets; sterling and yen strengthened |
|
|
Bitcoin |
+0.4% |
Modest gains as investors diversify currency exposure |
|
Forward-Looking Scenarios
Bullish Case:
- A dovish Powell reinforces risk appetite, extending the tech-led rally in U.S. equities while keeping gold well supported.
- Improving US–China relations bolsters trade flows and cyclical sectors, strengthening demand for commodities.
- Semiconductor demand continues to drive Asian equity markets to new highs.
Bearish Case:
- Hawkish language from Powell revives inflation fears, reducing market confidence in sustained easing.
- Dollar weakness reverses if yields climb further, pressuring gold and other safe-haven trades.
- Oil volatility resurfaces if sanctions significantly disrupt Russian supply, complicating inflation management.
Investor Takeaways
Markets are balancing between Fed-driven liquidity expectations and structural trade and commodity risks. For investors, the strategy is clear:
- Diversify exposure by holding both growth-sensitive sectors such as technology and defensive assets like gold.
- Hedge currency positions given the dollar’s volatility against sterling, yen, and digital assets.
- Focus on Powell’s rhetoric, which may prove more market-moving than the size of the rate cut itself.
The Fed’s decision this week will determine whether equities extend their historic run or whether markets revert to a more defensive posture.