United States
Wall Street wrapped up a volatile week on a quieter note, with investors taking stock after a two-day rebound ahead of the Federal Reserve’s policy decision and the formal start of the big-tech earnings season. The S&P 500 edged higher to finish near 6,915, paring earlier losses and reclaiming its year-to-date gains, although it still logged its first back-to-back weekly declines since June.
Leadership across the market was mixed. Large-cap technology stocks provided some support, with Nvidia rising 1.5% after Chinese authorities indicated that domestic tech companies could prepare orders for its H200 artificial intelligence chips. Microsoft also moved higher, helping the Nasdaq close up 0.3%. In contrast, Intel tumbled 17% after delivering a softer outlook, dragging on sentiment and pushing the Dow Jones Industrial Average down 0.6%.
Small-cap stocks underperformed, with the Russell 2000 falling 1.8% after outperforming the broader market earlier in the month. Bond markets were relatively steady, with the US 10-year Treasury yield easing by one basis point to 4.23%, reflecting expectations that the Fed will leave interest rates unchanged this week. The US dollar recorded its worst weekly performance since May, while the Japanese yen jumped 1.6% amid speculation authorities could move to stabilise the currency.
Geopolitical developments remained a background influence throughout the week. Markets were unsettled earlier by renewed tariff threats linked to Greenland before rhetoric softened and European retaliatory measures were delayed. Despite the uncertainty, individual investors continued to buy into weakness, with strong inflows reported during the midweek pullback.
Europe
European shares ended the week lower, posting their biggest weekly decline in two months as geopolitical risks lingered and higher oil prices weighed on airline stocks. The Stoxx Europe 600 slipped around 0.1% on Friday and fell about 1% over the week, snapping a five-week winning streak.
Travel and leisure stocks were among the weakest performers, pressured by rising fuel costs. Shares in major airlines including Deutsche Lufthansa, Air France-KLM and International Consolidated Airlines Group all moved sharply lower. Economically sensitive sectors such as banks, consumer products and construction also lagged, while telecoms and mining stocks outperformed.
Investor sentiment remained fragile after a week dominated by shifting trade headlines from Washington. While markets recovered some losses after tariff threats were dialled back, the episode reinforced the sensitivity of European equities to political developments. Economic data offered some stability, with euro area business surveys showing private-sector activity maintained moderate growth in January, supported by tentative improvement in Germany offsetting ongoing weakness in France.
Among individual movers, Ericsson surged 11% after reporting stronger-than-expected earnings, driven by cost reductions and improving margins. Elsewhere, Wacker Neuson plunged more than 20% after takeover discussions were terminated, while Adidas fell following a downgrade that cited slowing revenue growth.
Australia
Australian markets head into the new week with a shortened trading schedule, as the ASX will be closed on Monday for the Australia Day public holiday. Trading resumes on Tuesday, with ASX 200 futures pointing to a modestly higher open, up around 10 points or 0.1%.
On Friday, local shares finished marginally higher, with gains in technology and mining stocks offset by weakness in the major banks. The S&P/ASX 200 added 0.1% but ended the week lower overall amid heightened geopolitical tensions and a stronger-than-expected domestic jobs report that lifted expectations for an interest rate increase.
Technology stocks led the gains, highlighted by Life360, which surged more than 27% after upgrading its full-year guidance. Gold miners also performed strongly as bullion prices pushed to fresh record highs, lifting stocks such as Northern Star, Regis Resources and Greatland Resources. In contrast, the big banks weighed on the index, giving back some of their recent gains.
The Australian dollar strengthened alongside other major currencies, trading near US$0.6895, supported by a weaker US dollar and resilient local economic data. Looking ahead, investors will focus on upcoming quarterly reports from companies including Woodside Energy, Origin Energy and ResMed.
Commodities and currencies
Commodity markets were a standout overnight, driven by geopolitical concerns and sharp moves in currencies. Oil prices jumped, with Brent crude rising more than 3% to around US$66 a barrel, as traders factored in the possibility of US military action in the Middle East and severe winter weather forecast across parts of the United States.
Precious metals extended their powerful rally. Gold rose close to 1% to just under US$5,000 an ounce, marking its strongest weekly gain since 2020. Silver surged more than 6% to trade above US$100 an ounce, extending its year-to-date gains to nearly 40%. Copper also climbed, pushing above US$13,000 a tonne.
In currency markets, the Bloomberg dollar index fell 0.7%, while the euro and British pound both posted solid gains. The Japanese yen’s sharp rebound stood out as its biggest one-day rise in months. Bitcoin edged higher to around US$89,500, while ether was little changed.
As markets head into the new week, investors are balancing strong moves in commodities and currencies against an otherwise cautious tone, with attention firmly fixed on central bank decisions and the unfolding earnings season.
Economic Calendar
US:
- Chicago Fed National Activity Index (Nov) 00:30
- Durable Goods Orders (Nov) 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.
