Global Market Overview
US equity markets continued their positive momentum on Tuesday, following last week’s gains. The S&P 500 rose by 0.9%, marking its fifth gain in six trading sessions. Small-cap equities outperformed, reflecting a risk-on sentiment. Gains were broad-based, with most sectors in the green, led by industrials and real estate.
Investor optimism was buoyed by a measured approach to trade policy from the Trump administration, as it hinted at a slower rollout of tariffs. This eased market concerns and contributed to the rally. Meanwhile, the US dollar weakened, and bond yields fell, with the 10-year Treasury yield dropping to 4.56%, providing additional support to equities.
US Economic Developments
In economic news, US home prices experienced their largest annual increase in almost a year. For the first time since May 2022, all 50 of the largest metropolitan areas posted year-over-year gains. This was regarded as a positive signal for the broader economy.
However, challenges for Apple persisted. The tech giant faced analyst downgrades and reported a decline in iPhone sales in China during the December quarter. These results underscore ongoing struggles in a key market for Apple.
Latest Market and Economic Update
Asia Market Performance
Asian markets were generally upbeat on Wednesday, with strong performances from technology stocks. Japan’s Nikkei 225 rose 1.5%, while South Korea’s KOSPI added 0.6%, driven by OpenAI’s $500 billion AI infrastructure partnership. However, Chinese equities underperformed, with the Shanghai Composite and Hong Kong’s Hang Seng Index falling sharply. These declines were attributed to concerns over potential new US tariffs on Chinese imports.
U.S. Equity Futures and European Markets
U.S. equity futures rose on Wednesday, building on Tuesday’s rally as investors welcomed President Trump’s moderate stance on trade tariffs. Gains were expected in shares of Oracle, Netflix, and United Airlines, following strong earnings reports.
European equities gained 0.4%, with the STOXX 600 reaching a three-month high. Healthcare stocks, led by Novo Nordisk, outperformed, while luxury stocks such as Burberry also contributed to gains. However, uncertainty surrounding Trump’s proposed tariffs weighed on European automakers and basic resources.
Cryptocurrency and Oil Updates
Bitcoin Rally on Regulatory News
Bitcoin traded above $105,600, following news that the SEC is forming a cryptocurrency task force to clarify industry regulations. The cryptocurrency has surged over 50% since Donald Trump’s election victory, as investors anticipate a more crypto-friendly regulatory environment under his administration.
Oil Prices Steady Amid Supply Concerns
Oil prices remained stable during Asian trading, with Brent crude at $79.24 per barrel and WTI at $75.69. The market balanced concerns over tightening supplies caused by US sanctions on Russia and Trump’s push for increased domestic energy production, against potential impacts from US trade tariffs and cold weather disruptions.
Equities on the Move
Netflix Outperforms Expectations
Netflix added 18.9 million subscribers in its holiday quarter, surpassing Wall Street expectations. The company announced price hikes for most of its plans in the US, Canada, Portugal, and Argentina. Revenue grew by 16%, and operating income exceeded targets. Entering 2025 with improved fundamentals, Netflix raised its revenue guidance to $43.5 to $44.5 billion, pushing shares up more than 14% in after-hours trading.
United Airlines Reports Strong Earnings
United Airlines reported stronger-than-expected Q4 earnings, driven by robust travel demand and better pricing. The airline forecasted a full-year profit of $11.50 to $13.50 per share, with expected Q1 profits between $0.75 and $1.25 per share, beating analysts’ projections.
Nvidia Takes the Lead
Nvidia overtook Apple as the world’s most valuable company for the third time. The company benefited from strong demand for AI chips, with shares up 4% this year. In contrast, Apple’s shares have fallen by 12% in 2025, driven by an 18.2% decline in iPhone sales in China during the December quarter and a 5% global drop.
Other Key Movers
- Charles Schwab: Reported Q4 earnings of $1.01 per share, with a 20% YoY revenue increase to $5.3 billion. The company added $114.8 billion in new assets during the quarter and opened 1.1 million new brokerage accounts.
- D.R. Horton: Beat expectations with Q1 earnings of $2.61 per share despite a 1% YoY revenue decline to $7.61 billion. The company closed 19,059 homes, but its backlog fell by 21% to $4.30 billion, below forecasts.
- Porsche: Confirmed a 2024 profit margin outlook of 14–15%, but warned of challenges in 2025 due to the EU withdrawal of the Macan and 718 models. Porsche expects a decline in sales this year, partly due to supply chain issues with the 911 model.
Key Currency and Market Trends
The US dollar held steady at 108.1, even as uncertainty around Trump’s tariff plans lingered. Meanwhile, the euro traded at 1.0415 against the dollar, weighed down by inflation concerns and speculation about potential Fed rate cuts later in the year.
Upcoming Data and Events
The following key data and events are expected:
- Earnings reports from Johnson & Johnson and Procter & Gamble.
- Economic data releases, including UK inflation figures and Eurozone preliminary Q4 2024 GDP estimates.
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