United States
Wall Street closed out Thursday on a positive note as easing geopolitical tensions and solid economic data combined to lift equities across the board.
The S&P 500 advanced 0.6 per cent to 6,914, while the Dow Jones Industrial Average climbed 0.7 per cent to 49,417. The tech-heavy Nasdaq 100 added 0.8 per cent, with the Magnificent Seven index surging 2.1 per cent as renewed enthusiasm for artificial intelligence lifted the sector.
Comments from Nvidia chief Jensen Huang at the World Economic Forum in Davos helped reinforce investor confidence in the AI trade, while BlackRock chief executive Larry Fink declared there was no bubble forming in the space. Meta Platforms jumped 5.5 per cent and Tesla gained 3.7 per cent.
Perhaps more notable was the continued strength in small-cap stocks, with the Russell 2000 hitting a fresh record and extending its winning streak against the S&P 500 to 14 consecutive sessions. Market watchers see this broadening of returns as a healthy sign for the underlying economy.
On the economic front, revised data confirmed the US economy expanded at a 4.4 per cent annualised pace in the third quarter, the fastest in two years, while weekly jobless claims held steady at 200,000. Personal spending rose solidly in November, underscoring the resilience of American consumers.
The Federal Reserve’s preferred inflation gauge, core personal consumption expenditure, rose 0.2 per cent month-on-month and 2.8 per cent from a year earlier. The data reinforced expectations that policymakers will keep rates on hold at next week’s meeting, with markets pricing the next cut for around June when a new Fed chair is expected to take the reins.
Geopolitical relief also played a role in Thursday’s gains after President Donald Trump abandoned his threat to impose tariffs on European nations over his Greenland ambitions. European Union lawmakers are now expected to proceed with ratifying the bloc’s trade deal with the United States.
JPMorgan Chase pared gains after Trump sued the lender and chief executive Jamie Dimon over alleged debanking practices, while Intel delivered a tepid forecast after the close.
Europe
European equities snapped a four-day losing streak as the relief from Trump’s tariff reversal rippled through trade-exposed sectors.
The Stoxx 600 climbed 1.0 per cent, with automakers leading the charge higher. The sector jumped 2.2 per cent as carmakers celebrated the removal of the tariff threat, while strong cash flow figures from Volkswagen and Michelin added further impetus. Volkswagen surged 6.5 per cent, with Mercedes-Benz and Michelin also posting solid gains.
Banks were another bright spot, advancing 2.0 per cent as Santander, UniCredit and BBVA all rallied strongly. BBVA touched a record closing level.
Defence stocks retreated sharply as the de-escalation over Greenland reduced appetite for the sector. Safran fell 3.0 per cent, Rheinmetall dropped 3.4 per cent and BAE Systems shed 3.7 per cent, although JPMorgan suggested investors should view the pullback as a buying opportunity.
Healthcare was buoyed by Novo Nordisk, which jumped 6.1 per cent after analysts lifted their price target on optimism surrounding the company’s Wegovy weight-loss pill. Telenor rallied 7.0 per cent after selling its $3.9 billion stake in Thailand’s True Corp.
Construction booked its biggest daily gain since June, while technology stocks edged higher with ASML reaching a record close. Energy was the notable laggard, slipping 0.3 per cent as oil prices retreated on news of potential trilateral peace talks between Ukraine, the United States and Russia.
Australia
Australian shares are poised for a quiet start to Friday’s session, with S&P/ASX 200 futures down six points or 0.1 per cent to 8,804.
Broker activity was busy overnight. UBS upgraded NAB to buy with a $47 price target and lifted South32 to buy at $4.90, while also cutting Northern Star to neutral. Jefferies and Macquarie both upgraded Netwealth, though Jarden took the opposite view and downgraded it to neutral. JPMorgan raised Bank of Queensland to neutral and cut Nine Entertainment.
Alcoa delivered strong fourth-quarter results overnight, reporting adjusted EBITDA of $546 million and flagging higher production across both its alumina and aluminium businesses in 2026. The company completed the closure of its Kwinana refinery in Western Australia during the year and resolved a long-running Australian tax dispute.
Santos shares could remain in focus after Citi reaffirmed its buy rating, arguing that falling execution risk across major projects now outweighs softer 2026 production guidance. Elsewhere, Guzman y Gomez announced Uber Eats as its exclusive delivery partner in Australia from late February.
Bond yields edged higher, with the three-year rising 6.6 basis points to 4.24 per cent and the ten-year adding 1.6 basis points to 4.80 per cent.
Commodities and currencies
Gold extended its remarkable run, crossing the $4,900 mark for the first time as a softer US dollar and expectations of further monetary easing lifted investor appetite for the precious metal. Spot gold was last up 1.8 per cent to $4,920 an ounce.
Oil prices retreated as geopolitical tensions eased on multiple fronts. Ukrainian President Volodymyr Zelensky confirmed plans for trilateral meetings with the United States and Russia, while the resolution of the Greenland dispute also weighed on crude. Brent fell 1.8 per cent to $64.04 a barrel, with West Texas Intermediate down 2.0 per cent to $59.43.
The Australian dollar rallied 1.2 per cent to 68.40 US cents as the greenback weakened broadly following the strong economic data, which paradoxically pressured the US currency. The euro rose 0.5 per cent to $1.1748, while the yen was little changed at 158.44 per dollar.
Iron ore edged 0.5 per cent higher to $103.65 a tonne. Bitcoin slipped 0.7 per cent to $89,526.
Economic Calendar
US:
- S&P Global US Manufacturing PMI 01:45
- Leading Index Nov 02:00
- Uni. of Michigan Sentiment Jan 02:00
EU:
- HCOB Eurozone Manufacturing PMI Jan 20:00
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
