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Tech resilience offsets Fed and oil jitters

Global stock markets extended their gains midweek as investors looked past a more hawkish tone from the Federal Reserve (Fed) and focused on robust technology momentum and signs of economic resilience. US equities closed higher on Wednesday but pared intraday advances after Fed minutes revealed divisions over the future interest rate path and underlined persistent inflation risks, while European indices climbed to new record highs and Asian markets were trading broadly firmer on Thursday, led by tech-driven rallies in South Korea and Japan. Oil prices held at elevated levels after a sharp jump on fears of a potential US-Iran conflict. Gold was firmer on Thursday, trading just above USD 5000 per ounce, while US Treasury yields continued to slowly climb across the curve.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

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Asian equities moved higher on Thursday as robust gains in technology shares helped investors look past uncertainty over future US interest rates, with Australia’s ASX 200 and South Korea’s KOSPI both reaching record highs. The KOSPI surged 3%, led by tech stocks as Samsung Electronics rose more than 4% to a record after reports of planned price increases for advanced memory chips amid strong AI demand, while SK Hynix also benefited from expectations of ongoing supply tightness. Australia’s ASX 200 climbed nearly 1%, supported by mining group Rio Tinto and banks, as softer-than-expected January employment growth tempered expectations for further rate hikes by the Australian Reserve Bank even though the unemployment rate held at 4.1%. Japan’s Nikkei 225 was trading 0.7% higher, also gained in step with other regional markets and Wall Street, while trading in mainland China and Hong Kong remained closed for the Lunar New Year holiday.

US stocks trim gains after Fed minutes

US equities ended higher on Wednesday, although major indices surrendered part of their earlier advances after the Fed highlighted ongoing inflation risks in the FOMC minutes of its late-January meeting. The Dow Jones Industrial Average rose 0.3% to 49,662.66 points, staying below the 50,000 mark, while the Nasdaq 100 gained 0.8% to 24,898.87 points and the broader S&P 500 added 0.6% to 6881.31 points. Investor caution has increased as markets reassess the impact of artificial intelligence on corporate business models, prompting a shift towards safer assets. Fed policymakers left their key interest rate unchanged in a late-January meeting but the minutes released on Wednesday showed growing divisions over the next policy steps. Several officials signalled that additional rate cuts later this year would only be appropriate if inflation continues to ease, while others argued for keeping rates on hold for an extended period and even flagged the possibility of renewed hikes should price pressures remain elevated.

European stocks hit new records

European equity markets climbed to fresh record highs on Wednesday, lifted by strong US share gains and signs of economic resilience. The EuroStoxx 50 rose 1.3%, its largest daily increase since early January, while Switzerland’s SMI gained 0.4%. Investors drew confidence from recent macroeconomic data - such as better-than-expected US growth, a strong rebound in German exports at the end of last year and continued support from monetary and fiscal policy - with broad indices such as the Stoxx 50 and Stoxx 600 reaching record levels. Cyclical sectors led the advance, with mining group Glencore and defence contractor BAE Systems rallying on upbeat analyst assessments and growth prospects.

UK inflation slowdown supports rate cut hopes

UK consumer price inflation eased to 3% in January, down from 3.4% in December and matching economists’ expectations, according to data released on Wednesday by the Office for National Statistics, while core inflation slipped to 3.1% from 3.2%. The slowdown, which marks the lowest annual reading since March 2025, was attributed largely to lower petrol and airfares and weaker food prices. Labour market figures published on Tuesday showed further signs of cooling, with the unemployment rate rising to 5.2% in December, the highest in five years, and wage growth moderating in the final three months of 2025. The softer inflation and weaker growth backdrop, including fourth-quarter economic expansion of just 0.1%, has strengthened market expectations that the Bank of England could start reducing its key interest rate from 3.75% at its March meeting.

Oil rises on US-Iran conflict fears

Oil prices held on to strong gains on Thursday after Brent crude jumped 4.3% on Wednesday to trade above USD 70 per barrel, while West Texas Intermediate moved above USD 65, amid concerns over a possible US military operation against Iran. Reports that any intervention could last several weeks and that Israel is pressing for regime change in Tehran have raised fears of supply disruptions from a region that produces about one-third of global crude. The geopolitical risk comes as talks over Iran’s nuclear programme remain unresolved, the US imposes new visa restrictions on Iranian officials, and negotiations to end the war in Ukraine show little progress. US crude inventories fell by 609,000 barrels last week according to industry data, ahead of official figures due on Thursday.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Airbus, Alibaba, Deere, Nestlé, Rio Tinto, Walmart, and Zurich.

Economic data in focus: Swiss trade balance (08:00), Bundesbank monthly report (12:00), US weekly initial jobless claims (14:30), Canadian trade balance (14:30) and euro-area consumer confidence (16:00).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.