US stock futures retreated on February 4, 2025, signaling a third consecutive day of losses for the S&P 500 as traders grappled with the economic implications of tariffs. The dollar weakened, and bond yields rose, reflecting market unease. S&P 500 futures dipped 0.2%, while European stocks also declined. The moves were relatively muted, attributed to china’s restrained response to US tariffs and a last-minute reprieve for canada and Mexico. Despite this, the dollar index slid 0.3%, with some traders expressing relief that the worst-case scenarios appeared to be avoided.
Colin Graham, head of multi-asset strategies at Robeco Group, emphasized caution, stating, “We will be cautious in the short term until we get a good read on de-escalation on tariffs.”
In premarket trading, Palantir Technologies Inc. shares surged as much as 20% after the software company issued a stronger-than-expected forecast, driven by demand for its AI products. Traders are also eyeing earnings reports from industry heavyweights like Alphabet Inc., Merck & Co. Inc.,and Pfizer Inc., set to be released on Tuesday, alongside data on US factory and durable goods orders.
Europe’s Stoxx 600 benchmark fell for a second day amid mixed corporate earnings.By monday, companies representing about a quarter of Europe’s market capitalization had reported, with a net 11% beating earnings expectations and 55% surpassing sales forecasts, according to morgan Stanley.
UBS Group AG shares dropped as concerns over potential increases in capital requirements overshadowed better-than-expected results. Vodafone Group Plc also declined after the communications firm highlighted worsening conditions in Germany. Conversely, BNP Paribas rose on a surge in trading revenue.
In the commodities market, crude oil prices declined due to a worsening demand outlook, while gold hovered near a record high.
key Events This Week
Table of Contents
| Date | Event |
|—————-|————————————————————————–|
| Tuesday | US factory orders, durable goods; alphabet earnings; Fed speeches |
| Wednesday | China Caixin services PMI; Eurozone HCOB Services PMI, PPI; US trade |
| Thursday | Eurozone retail sales; UK rate decision; Amazon earnings; Fed speeches |
| Friday | US nonfarm payrolls, unemployment, consumer sentiment; Fed speeches |
Market Snapshot
- Stoxx Europe 600: Fell 0.3% as of 9:27 a.m. London time
- S&P 500 Futures: Declined 0.2%
- Nasdaq 100 Futures: Dropped 0.1%
As markets navigate the complexities of tariffs and corporate earnings, investors remain vigilant, awaiting further clarity on economic indicators and central bank commentary.
Global Markets Experience Mixed Trends as Currencies, Cryptocurrencies, and Commodities Show Volatility
Global markets showcased a mixed performance this week, with indices, currencies, and commodities reflecting diverse trends. While Asian and emerging markets saw gains, U.S. futures dipped, and cryptocurrencies faced significant declines. Here’s a detailed breakdown of the latest developments.
Equities: Dow Futures Dip, asia and Emerging Markets Rise
Futures on the Dow Jones Industrial Average fell 0.3%, signaling caution among investors. In contrast, the MSCI Asia Pacific Index rose 1.2%, driven by positive sentiment in the region. Emerging markets also performed well, with the MSCI Emerging Markets Index climbing 1.6%.
Currencies: Dollar Weakens, Yuan Gains
The Bloomberg Dollar Spot index fell 0.3%,reflecting a broader decline in the U.S. dollar’s strength. The euro remained steady at $1.0344, while the Japanese yen dropped 0.3% to 155.17 per dollar. the offshore yuan rose 0.3% to 7.2923 per dollar, and the British pound edged down 0.1% to $1.2432.
Cryptocurrencies: Bitcoin and Ether Face Sharp Declines
Cryptocurrencies experienced significant losses, with Bitcoin falling 3.1% to $98,770.36 and Ether dropping 3.7% to $2,713.99. These declines highlight the ongoing volatility in the digital asset market.
Bonds: Yields Rise Across Major Economies
Bond yields saw upward movement, with the yield on 10-year Treasuries advancing one basis point to 4.57%. similarly, Germany’s 10-year yield rose three basis points to 2.41%,and Britain’s 10-year yield increased four basis points to 4.53%.
Commodities: Brent Crude Falls, Gold Steady
In the commodities market, Brent crude fell 1.3% to $74.98 a barrel, reflecting concerns over global demand. Meanwhile, spot gold remained largely unchanged, maintaining its position as a safe-haven asset.
Key Market Movements at a glance
| Category | Indicator | Change |
|————————-|————————————|——————|
| Equities | Dow Jones Futures | -0.3% |
| | MSCI Asia Pacific Index | +1.2% |
| | MSCI Emerging Markets Index | +1.6% |
| Currencies | Bloomberg Dollar Spot Index | -0.3% |
| | Euro | Unchanged |
| | Japanese Yen | -0.3% |
| | Offshore Yuan | +0.3% |
| | British Pound | -0.1% |
| Cryptocurrencies | Bitcoin | -3.1% |
| | Ether | -3.7% |
| Bonds | 10-Year Treasuries Yield | +1 basis point |
| | Germany’s 10-Year Yield | +3 basis points |
| | Britain’s 10-Year Yield | +4 basis points |
| Commodities | Brent Crude | -1.3% |
| | Spot Gold | unchanged |
What’s Next for Investors?
The mixed performance across global markets underscores the importance of staying informed and adaptable. While Asian and emerging markets show promise, the decline in U.S. futures and cryptocurrencies suggests caution. Investors should monitor key indicators like bond yields and commodity prices to navigate this volatile landscape effectively.
For more insights into global market trends, explore the latest updates on Bloomberg.
This story was produced with the assistance of Bloomberg Automation and includes contributions from Aya wagatsuma.
Interview on Global Market Trends
Editor: Let’s start with equities. The MSCI Asia Pacific Index rose 1.2%, driven by positive sentiment in the region. Can you elaborate on what’s fueling this optimism?
Guest: Certainly. The rise in the MSCI Asia Pacific Index reflects growing confidence in the region’s economic recovery, notably in markets like China and India. Strong corporate earnings, coupled with easing trade tensions, have bolstered investor sentiment.Additionally, central banks in the region have maintained accommodative monetary policies, which has further supported equity markets.
Editor: Emerging markets also performed well, with the MSCI Emerging Markets Index climbing 1.6%. What’s driving this upward trend?
Guest: Emerging markets are benefiting from a combination of factors. First, weaker U.S. dollar strength, as indicated by the decline in the Bloomberg Dollar Spot Index, makes these markets more attractive to foreign investors. Second, improving macroeconomic conditions, such as rising commodity prices and stabilizing inflation, have contributed to the positive performance. reforms in key emerging economies are enhancing investor confidence.
Editor: Shifting to currencies, the dollar weakened while the offshore yuan gained. What’s behind these movements?
Guest: The dollar’s decline is largely due to shifting expectations around U.S.monetary policy. With inflation showing signs of easing, investors are speculating that the Federal Reserve might slow its rate hikes. Conversely, the offshore yuan gained as China’s economic data exceeded expectations, reinforcing optimism about the country’s recovery. Currency markets are also reacting to global risk sentiment, which has been favorable for emerging market currencies.
Editor: Cryptocurrencies, on the other hand, faced sharp declines. Bitcoin fell 3.1%, and Ether dropped 3.7%. What’s causing this volatility?
Guest: Cryptocurrencies remain highly sensitive to macroeconomic factors. The decline in Bitcoin and Ether reflects broader risk aversion in the market,as well as regulatory uncertainties. Additionally, the recent surge in bond yields has made customary assets more appealing to investors, diverting attention away from digital assets. This volatility underscores the speculative nature of cryptocurrencies and their susceptibility to external shocks.
Editor: Speaking of bonds, yields rose across major economies. What’s driving this upward movement?
Guest: Rising bond yields are a sign of shifting expectations around inflation and monetary policy. In the U.S., the yield on 10-year Treasuries advanced as investors anticipate a prolonged period of higher rates. Similarly, in Europe, central banks have signaled a more hawkish stance, pushing yields up. This trend reflects concerns about inflation and the cost of borrowing, which could impact economic growth in the long term.
Editor: let’s talk about commodities. Brent crude fell 1.3%, while spot gold remained steady.What’s the outlook here?
Guest: The decline in Brent crude reflects concerns over slowing global demand, particularly in major economies like China and the U.S. On the other hand, spot gold has held steady as investors seek safe-haven assets amid market uncertainty. Commodities are likely to remain volatile, with factors like geopolitical tensions and economic data driving price movements.
Conclusion
The mixed performance across global markets highlights the importance of staying informed and adaptable.While equities in Asia and emerging markets show promise, the volatility in cryptocurrencies and rising bond yields suggest a cautious approach. Investors should monitor key indicators and remain flexible to navigate this dynamic surroundings effectively. For deeper insights, explore the latest updates on Bloomberg.
