United States
It was a rough night for the tech giants, with the Nasdaq 100 suffering its worst session in a month as investors continued their exodus from richly valued megacap names. All seven of the so-called “Magnificent Seven” stocks finished in the red, dragging the S&P 500 down 0.5 per cent to 6,906 for its first back-to-back losses of 2026. The Dow Jones Industrial Average fared better, slipping just 0.3 per cent to 49,032.
Yet beneath the headline numbers, a different story was unfolding. More than 300 companies in the S&P 500 actually finished higher on the day, with the index’s equal-weighted version adding 0.4 per cent. The real action was in small caps, where the Russell 2000 climbed 0.7 per cent to outperform the S&P 500 for a ninth consecutive session – matching the longest such streak since 1990.
Bank earnings added to the cautious mood. Wells Fargo tumbled 4.6 per cent after missing profit estimates, while concerns about Bank of America’s expense outlook sent its shares down 3.8 per cent. Citigroup slipped 3.3 per cent as executives tempered analyst enthusiasm around regulatory progress.
The bond market caught a modest bid, with the yield on 10-year Treasuries falling four basis points to 4.14 per cent. Money markets continue to price the next Federal Reserve rate cut for mid-2026, with the central bank appearing comfortable on the sidelines given low unemployment and above-trend growth.
The Fed’s Beige Book survey offered some encouragement, noting economic activity had picked up at a “slight to modest pace” across most regions since mid-November – an improvement on the prior three reports where most districts reported little change.
Political uncertainty lingered as the US Supreme Court declined to rule on challenges to President Donald Trump’s tariff policy, pushing any decision to next week at the earliest.
Europe
European shares finished marginally higher, with the Stoxx 600 adding 0.2 per cent as sector performance diverged sharply.
Miners were the standout performers, closing at their highest level since April 2022 as metals prices continued their blistering start to the year. Rio Tinto gained 2.3 per cent, Glencore jumped 3.0 per cent and Anglo American advanced 1.7 per cent, all riding the wave of record prices for gold, silver, copper and tin.
The chemicals sector climbed 2.0 per cent to a two-month high, supported by upgrades for EMS-Chemie and Yara, while banks touched their highest level since 2008 and the energy sector also reached heights not seen since that year as oil prices rallied.
Healthcare stocks finished at their best level since March 2025, led by AstraZeneca and Novartis, both of which hit record closing prices. Finnish drugmaker Orion surged 12 per cent after issuing strong guidance, lifting its partner Bayer by 7.0 per cent.
Tech stocks retreated after hitting their highest level since November 2000 the previous session, with the sector falling 1.8 per cent. ASML, SAP and Infineon led the decline. Industrials also weakened, dropping 0.8 per cent as defence and data-centre-linked stocks pulled back from record highs.
Australia
Local shares are pointing to a subdued start on Thursday, with S&P/ASX 200 futures flat at 8,799.
Rio Tinto will command attention after reports emerged the mining giant has engaged Evercore’s Simon Robey and JPMorgan to advise on a potential combination with Glencore. American depositary receipts for BHP jumped 2.7 per cent overnight, while Rio Tinto’s ADRs added 2.4 per cent on the back of the metals rally.
Broker activity was busy. Citi upgraded ANZ Group to buy with a $40.30 price target and lifted Bank of Queensland to buy, though it cut Bendigo & Adelaide Bank to sell. Treasury Wine was also downgraded to sell at Citi with a $4.80 target. Jefferies upgraded Arena REIT and Charter Hall Retail, but cut Vicinity Centres to underperform.
In other corporate news, JPMorgan Chase emerged as a substantial shareholder in DroneShield after lifting its stake to 5.19 per cent. Morningstar warned gold equities are trading well ahead of fundamentals despite raising its near-term bullion price assumptions.
Bond yields edged higher, with the three-year rising marginally to 4.11 per cent and the ten-year adding half a basis point to 4.72 per cent.
Commodities and currencies
Precious metals extended their remarkable rally, with gold advancing 1.0 per cent to US$4,631 an ounce after touching fresh record highs. Silver and copper also hit new records as investors piled into commodities as alternatives to traditional assets.
Oil prices climbed to their highest since October as tensions over Iran dominated sentiment. Brent crude gained 2.0 per cent to US$66.78 a barrel, while West Texas Intermediate rose to around US$60.
The Australian dollar weakened slightly to 66.81 US cents as the greenback held firm. The euro was steady at US$1.1639, while the Japanese yen edged higher to 158.59 per dollar.
Bitcoin rallied 3.7 per cent to US$97,512, with ethereum gaining 5.3 per cent.
Economic Calendar
US:
- Empire Manufacturing Jan 00:30
- Initial Jobless Claims Jan 00:30
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
