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Friday saw pressure in the U.S. stock market following President Donald Trump's announcement of Kevin Warsh, a former Federal Reserve governor, as the new Fed chairman. This news coincided with a higher-than-expected Producer Price Index (PPI) reading.
The S&P 500 decreased by 29 points (-0.43%), closing at 6,939. The Nasdaq 100 fell 331 points (-1.28%), ending at 25,552, while the Dow dropped 179 points (-0.36%), finishing at 48,892.
In terms of sector performance, Consumer Staples (XLP), Energy (XLE), and Health Care (XLV) were the standout sectors, while Technology (XLK), Materials (XLB), and Industrials (XLI) lagged behind.
Looking at the week as a whole, the S&P 500 rose by 0.34%, in contrast to a 0.21% decline in the Nasdaq 100 and a 0.42% drop in the Dow. The leading sectors for the week included Energy (XLE) and Communications (XLC), while Health Care (XLV) and Consumer Discretionary (XLY) faced the most significant declines.
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U.S. Economic Developments: |
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The Producer Price Index (PPI) recorded a 3% year-over-year increase for December, exceeding the expected 2.9%. On a monthly basis, it rose by 0.5%, significantly higher than the anticipated 0.2% increase. In addition, the Chicago PMI surged to 54 in January, marking its first rise above the 50 threshold since November 2023, which signals an expansion. Analysts had forecasted a decline to 45, down from the revised 42.7 reported for December (previously 43.5).
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Apple (AAPL) rose by 0.46%, driven by better-than-expected first-quarter revenue results and a 19% increase in earnings per share (EPS), which surpassed forecasts and set a new record high.
SanDisk (SNDK) saw a significant 6.85% increase as its adjusted EPS guidance for the current quarter greatly exceeded expectations.
Verizon Communications (VZ) experienced an 11.83% surge following stronger-than-anticipated earnings guidance for 2026.
Chevron (CVX) gained 3.34% after announcing quarterly earnings that exceeded estimates.
Western Digital (WDC) experienced a sharp decline of 10.12%, despite reporting quarterly financial results that surpassed expectations.
Visa (V) slid 3% as its quarterly adjusted EPS was roughly in line with predictions.
Deckers Outdoor (DECK) soared 19.46%, outperforming estimates for its 2026 outlook, making it the top performer in the S&P 500.
KLA (KLAC) dropped 15.24% due to disappointing adjusted EPS forecasts for the current quarter.
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At the European close, the major indices in the region finished in positive territory. Germany's Dax rose 229pts (+0.94%) to 24538, France's Cac 40 gained 55pts (+0.68%) to 8126, and the U.K.'s FTSE 100 increased 51pts (+0.51%) to 10223.
European economic data showed that the eurozone's GDP grew by 0.3% in the fourth quarter, matching the previous quarter and exceeding expectations of 0.2% in the initial reading. In Germany, GDP also increased by 0.3% in the fourth quarter, in line with the first estimate and surpassing the anticipated 0.2% after maintaining the same growth rate in the third quarter. Additionally, Germany's inflation rate rose to 2.1% year-over-year in January, as per preliminary figures, higher than the expected 1.9% and up from 1.8% in December.
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Global Macro, FX & Commodities: |
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Rates & Risk Sentiment:
In today's trading session, heightened market volatility followed President Trump's nomination of Kevin Warsh as the new Fed chairman. This development spurred changes in investor sentiment, reflected in the VIX index, which increased by 0.56 points (+3.32%) to 17.44. Concurrently, the US 10-year yield fell by 0.125 basis points, settling at 4.243%, signifying a cautious outlook among investors.
Precious Metals & Crude:
Precious metals faced a dramatic sell-off, halting their upward momentum. Gold plummeted $515.59 (-9.56%) to $4,879.29, while silver saw an even steeper decline of $31.27 (-26.93%), closing at $84.85.
In contrast, crude oil prices experienced an uptick as geopolitical tensions between the U.S. and Iran continue. West Texas Intermediate (WTI) Crude Oil gained $0.34 (+0.52%), reaching $65.76.
The Dollar & Majors:
The dollar index showed strength, rising 0.82 points (+0.85%) to 97.104, indicating increased demand for the greenback amid shifting market dynamics.
EUR/USD fell 118 pips (-0.99%) to 1.1851.
GBP/USD slipped 122 pips (-0.88%) to 1.3681.
USD/JPY increased 166 pips (+1.08%) to 154.75.
USD/CHF surged 90 pips (+1.18%) to 0.773.
AUD/USD dropped 84 pips (-1.19%) to 0.6962.
USD/CAD advanced 131 pips (+0.97%) to 1.362.
Digital Assets:
The cryptocurrency market faced significant pressure today, with Bitcoin experiencing heightened volatility. It dipped below $85,000, reaching an intraday low of $81,000. Ultimately, Bitcoin closed at $84,352, down $49 (-0.06%). Similarly, Ethereum fell $110 (-3.91%) to $2,706.
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