US Equities Show Mixed Results
US equity markets closed mixed on Wednesday. The Nasdaq and S&P 500 posted modest gains, while the Dow Jones saw a slight decline. Investors remained cautious amid mixed economic data, including a dip in new home sales and a decline in mortgage applications, although corporate earnings provided some relief.
The technology sector continued to lead, driven by expectations for strong results from AI giant Nvidia, despite broader concerns about economic growth and tightening Fed policies. Treasury yields edged lower, reflecting market expectations for potential rate cuts later this year, as investors weighed the likelihood of economic slowdowns and more volatility in the months ahead.
Sector Rotation and Market Volatility
The market has seen notable rotations in recent weeks, with value and cyclical sectors, such as energy and healthcare, outperforming the mega-cap technology names. This shift has been driven by investor focus on more attractive valuations and areas of earnings growth, particularly in international markets, which have outperformed US equities. Despite the recent pullbacks, these are seen as normal market corrections, with volatility expected to rise after two years of strong performance and low fluctuations. As the market matures, investors are encouraged to embrace diversification, positioning themselves for long-term opportunities while maintaining balanced exposure across sectors and regions.
Latest Global Market and Economic Update
Asian Equities See Modest Declines
Asian equities mostly edged lower on Thursday, with technology shares retreating following Nvidia’s post-earnings decline, and Hong Kong’s Hang Seng index slipping from a three-year high due to profit-taking. Mainland Chinese shares also saw modest losses, while Australia’s ASX 200 and Japan’s TOPIX posted small gains, supported by positive earnings reports.
US Equity Futures Largely Unchanged
US equity futures were largely unchanged overnight as investors processed Nvidia’s earnings report, which showed a 78% year-on-year revenue increase driven by strong demand for its GPUs. Meanwhile, Salesforce saw a significant drop of over 5% following disappointing results, while market sentiment was also affected by President Trump’s announcement of new tariffs on European autos and delayed tariffs on Mexico and Canada.
European Equity Market Hits Record High
European equities closed at a record high on Wednesday, with the STOXX 600 rising 1%, led by gains in banks and insurers, while upbeat results from Wienerberger boosted the construction sector. Notable movements included Anheuser-Busch InBev’s 8.9% jump, Wolters Kluwer’s 10.9% drop, and Stellantis falling 4.1%, while optimism around pro-growth policies and higher defence spending lifted Germany’s mid-cap equities.
US Dollar Strengthens
The US dollar strengthened on Thursday, rising to around 106.6 on the dollar index, as President Trump’s tariff announcements fuelled market caution. The euro traded lower at 1.0464 against the dollar, with concerns over further tariffs and expectations of Fed rate cuts weighing on investor sentiment.
Oil Prices Edge Up
Oil prices edged up this morning, recovering slightly from a two-month low as investors weighed fresh tariff threats from President Trump and a mixed U.S. inventory report. While a draw in crude oil stocks provided some support, concerns over increased refined product stocks and geopolitical tensions kept the market cautious.
Key Stock Movements
Nvidia (NVDA)
Nvidia reported stronger-than-expected Q4 results, with adjusted earnings per share of $0.89 and revenue of $39.3 billion, up 78% year-on-year, and forecasted Q1 revenue of $43 billion. The company expressed optimism about demand for its next-generation Blackwell AI chips, despite concerns over rising competition from Chinese AI firms. CEO Jensen Huang highlighted that post-training AI models are driving increased demand.
Salesforce (CRM)
Salesforce forecasted fiscal 2026 revenue below Wall Street expectations, citing slower adoption of its Agentforce platform, which sent shares down around 5% in after-hours trading. The company’s downbeat outlook reflects a pressured spending environment, with enterprises cautious amid high interest rates and economic uncertainty. The success of Agentforce is now seen as key to returning to double-digit growth.
CRH (CRH)
CRH forecasted core profit growth of 6% to 12% for 2025, following a 12% increase in 2024, driven by strong infrastructure and non-residential activity. The company, benefiting from increased U.S. public capital spending and global reshoring trends, expects its full-year adjusted EBITDA to rise to between $7.3 billion and $7.7 billion, up from $6.9 billion in 2024.
Snowflake (SNOW)
Snowflake shares surged 9% in after-hours trading following a strong fourth-quarter earnings report that exceeded analyst expectations and a new partnership with Microsoft to integrate OpenAI models. The company posted adjusted earnings per share of $0.30, revenue of $986.8 million, and a 28% year-on-year increase in product revenue, while also forecasting 21-22% year-on-year growth in product revenue for the first quarter.
eBay (EBAY)
eBay shares fell 8.5% in after-hours trading after the company issued weaker-than-expected first-quarter revenue guidance, despite reporting better-than-anticipated fourth-quarter earnings. The e-commerce giant posted adjusted earnings per share of $1.25 and a slight revenue increase of 1% year-on-year, but its Q1 2025 revenue forecast of $2.52 billion to $2.56 billion disappointed investors.
Lowe’s (LOW)
Lowe’s reported unexpected fourth-quarter growth in comparable sales, rising by 0.2%, surpassing expectations of a 1.82% decline, thanks to its strategy targeting both retail and professional customers. However, for the 2025 fiscal year, the company forecast flat to modest growth in sales and slightly lower-than-expected earnings per share, citing near-term uncertainty in the home improvement market.
Anheuser-Busch InBev (BUD)
Anheuser-Busch InBev’s shares rose over 8% after reporting stronger-than-expected fourth-quarter earnings, with a 10.1% increase in EBITDA and full-year earnings of $3.53 per share. Despite challenges in China, strong performances in South America and EMEA boosted revenue, while cost controls improved its balance sheet and enabled a higher-than-expected dividend.
Deutsche Telekom (DTE)
Deutsche Telekom’s shares fell over 3% following weaker-than-expected fourth-quarter results, with challenges in Germany’s fixed-service revenue and revised U.S. guidance weighing on investor sentiment. Despite this, UBS maintained a positive long-term outlook, forecasting steady earnings growth and highlighting the company’s strong position in the U.S. and Germany.
Stellantis (STLA)
Stellantis issued a cautious outlook for 2025, warning that its revenue growth and positive cash generation would not materialize until the second half of the year, following a tough 2024 that included a slump in its U.S. business and the ousting of CEO Carlos Tavares. Shares dropped 5.2% as the company projected a modest margin and cash flow breakeven for the first half, amid high costs, sluggish demand, and competitive pressure from China.
General Motors (GM)
General Motors announced a 25% increase in its quarterly dividend and a new $6-billion share buyback programme, boosting investor confidence and sending shares up by 3.4%. The company plans to repurchase $2 billion of shares by mid-2025, while continuing to balance shareholder returns with investment in its electric vehicle business, which is expected to reduce operating losses this year.
BP (BP)
BP has announced a shift in strategy, cutting planned investments in renewable energy while increasing its oil and gas spending to $10 billion annually, aiming to boost earnings and shareholder returns. The company plans to raise its dividend by at least 4% and reduce its asset sales target to $20 billion by 2027, though the move caused its shares to fall over 1% in London trading.
Danone (BN)
Danone reported strong sales in 2024, with a 4.7% organic sales growth driven by its dairy and plant-based businesses. Shares rose 4.9% as the company maintained its full-year forecast, citing positive demand for its nutrition products and growing brands in North America and Asia.
Oil and Commodity Markets
Oil Prices
Oil prices were up slightly, recovering from a two-month low following a U.S. inventory report showing mixed results. While the crude oil stocks declined by 2.7 million barrels, the refined product stocks saw a build, creating concerns over market balance and crude oil prices. A tariff escalation between the U.S. and Europe added to the uncertainty surrounding the market.
Upcoming Events and Economic Data
Key Economic Reports
On Thursday, economic data releases included GDP, initial jobless claims, durable goods orders, and pending home sales. These reports were likely to impact the market’s trajectory, along with any adjustments in Fed policy outlooks.
Earnings Reports
Axa, Dell Technologies, Monster Beverage, and Vistra Corp are among the key companies set to release their quarterly earnings, offering more insight into the health of the global economy and corporate profits in the near term.
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