Wall Street futures dip, dollar retreats as volatility increases
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Wall Street futures slipped on Wednesday as investors digested Alphabet’s earnings miss, renewed trade war tensions, and uncertainty over U.S. foreign policy. Meanwhile, the U.S. dollar weakened against the yen, and gold surged to new highs amid rising risk aversion.
Markets React to Alphabet’s Earnings Disappointment
U.S. equity futures turned lower after Alphabet’s Q4 earnings fell short of expectations, sending its stock plummeting 7.6% in extended trading and erasing $192 billion in market cap. The tech-heavy Nasdaq futures fell 0.5%, while S&P 500 futures lost 0.4%, reflecting concerns over rising capital expenditures in the AI arms race. Investors are now shifting focus to upcoming earnings from Uber, Ford, Qualcomm, and Disney, which could set the tone for broader market sentiment.
Trade Tensions and U.S. Policy Uncertainty Weigh on Sentiment
Markets remain cautious following China’s retaliatory tariffs on $14 billion of U.S. exports, a response to Trump’s 10% levy on Chinese goods. Analysts note that while China’s countermeasures are measured, they may not be enough to pressure the U.S. to reverse its stance. Additionally, Trump’s unexpected comments about taking control of Gaza for economic development introduced a new layer of geopolitical uncertainty, further fueling market volatility.
Dollar Weakens as Treasury Yields Retreat
The U.S. dollar retreated after Treasury yields declined, with the Dollar Index (DXY) falling to 108.050 from Monday’s high of 109.880. The USD/JPY pair dropped 0.7% to 153.09, a seven-week low, as Japanese government bond yields surged on strong wage growth data, reinforcing expectations of further Bank of Japan tightening. The euro rebounded to $1.0380, recovering sharply from a two-year low of $1.0125 hit earlier in the week. The USD/CAD pair also fell to 1.4327, pulling back from a 22-year high of 1.4792.
Gold Hits Record High as Safe-Haven Demand Climbs
Gold prices surged to a fresh all-time high of $2,848 per ounce, driven by a weaker dollar, lower Treasury yields, and heightened risk aversion. The ongoing trade conflict and geopolitical concerns continue to bolster safe-haven demand, making gold one of the strongest performers in recent sessions. Oil Prices Edge Lower Amid U.S.-China Trade War and Iran Sanctions Oil prices dipped after China imposed tariffs on U.S. crude imports, adding downward pressure on global demand.
Brent crude fell 35 cents to $75.85 per barrel
WTI crude dropped 22 cents to $72.48 per barrel However, losses were limited as reports suggested Trump is reinstating his "maximum pressure" policy on Iran, aiming to reduce Iranian oil exports to zero, which could tighten supply in the coming months.
Market Outlook: Volatility Remains High
With earnings season in full swing, trade tensions escalating, and the Federal Reserve’s rate path uncertain, markets are bracing for continued volatility. Investors will be closely watching: U.S. jobs data on Friday (Nonfarm Payrolls) Further policy developments from Trump’s administration China’s next move in the trade war For now, risk sentiment remains fragile, with traders seeking safe havens in gold and the yen, while equities navigate a turbulent landscape.
Markets React to Alphabet’s Earnings Disappointment
U.S. equity futures turned lower after Alphabet’s Q4 earnings fell short of expectations, sending its stock plummeting 7.6% in extended trading and erasing $192 billion in market cap. The tech-heavy Nasdaq futures fell 0.5%, while S&P 500 futures lost 0.4%, reflecting concerns over rising capital expenditures in the AI arms race. Investors are now shifting focus to upcoming earnings from Uber, Ford, Qualcomm, and Disney, which could set the tone for broader market sentiment.
Trade Tensions and U.S. Policy Uncertainty Weigh on Sentiment
Markets remain cautious following China’s retaliatory tariffs on $14 billion of U.S. exports, a response to Trump’s 10% levy on Chinese goods. Analysts note that while China’s countermeasures are measured, they may not be enough to pressure the U.S. to reverse its stance. Additionally, Trump’s unexpected comments about taking control of Gaza for economic development introduced a new layer of geopolitical uncertainty, further fueling market volatility.
Dollar Weakens as Treasury Yields Retreat
The U.S. dollar retreated after Treasury yields declined, with the Dollar Index (DXY) falling to 108.050 from Monday’s high of 109.880. The USD/JPY pair dropped 0.7% to 153.09, a seven-week low, as Japanese government bond yields surged on strong wage growth data, reinforcing expectations of further Bank of Japan tightening. The euro rebounded to $1.0380, recovering sharply from a two-year low of $1.0125 hit earlier in the week. The USD/CAD pair also fell to 1.4327, pulling back from a 22-year high of 1.4792.
Gold Hits Record High as Safe-Haven Demand Climbs
Gold prices surged to a fresh all-time high of $2,848 per ounce, driven by a weaker dollar, lower Treasury yields, and heightened risk aversion. The ongoing trade conflict and geopolitical concerns continue to bolster safe-haven demand, making gold one of the strongest performers in recent sessions. Oil Prices Edge Lower Amid U.S.-China Trade War and Iran Sanctions Oil prices dipped after China imposed tariffs on U.S. crude imports, adding downward pressure on global demand.
Brent crude fell 35 cents to $75.85 per barrel
WTI crude dropped 22 cents to $72.48 per barrel However, losses were limited as reports suggested Trump is reinstating his "maximum pressure" policy on Iran, aiming to reduce Iranian oil exports to zero, which could tighten supply in the coming months.
Market Outlook: Volatility Remains High
With earnings season in full swing, trade tensions escalating, and the Federal Reserve’s rate path uncertain, markets are bracing for continued volatility. Investors will be closely watching: U.S. jobs data on Friday (Nonfarm Payrolls) Further policy developments from Trump’s administration China’s next move in the trade war For now, risk sentiment remains fragile, with traders seeking safe havens in gold and the yen, while equities navigate a turbulent landscape.