NEW YORK/ LONDON, Feb 3 : MSCI’s global equities gauge rose slightly on Tuesday while Wall Street’s main indexes lost ground as software stocks were slammed while investors waited for high-profile earnings reports but in contrast, precious metal prices rose sharply, regaining some lost ground following a two-day rout.
the U.S. dollar edged lower while the Australian dollar was the stand-out performer, rallying broadly after the central bank joined Japan as the only developed-world economy to raise interest rates.
Commodities stocks and the dollar have whipsawed since U.S. President Trump’s nomination of Kevin Warsh to lead the Federal Reserve last Friday. While he will be under pressure from Trump to cut interest rates, Warsh is keen to shrink the Fed’s balance sheet, which would …
NEW YORK/ LONDON, Feb 3 : MSCI’s global equities gauge rose slightly on Tuesday while Wall Street’s main indexes lost ground as software stocks were slammed while investors waited for high-profile earnings reports but in contrast, precious metal prices rose sharply, regaining some lost ground following a two-day rout.
the U.S. dollar edged lower while the Australian dollar was the stand-out performer, rallying broadly after the central bank joined Japan as the only developed-world economy to raise interest rates.
Commodities stocks and the dollar have whipsawed since U.S. President Trump’s nomination of Kevin Warsh to lead the Federal Reserve last Friday. While he will be under pressure from Trump to cut interest rates, Warsh is keen to shrink the Fed’s balance sheet, which would push up bond yields, which is seen as a negative for precious metals.
But on Tuesday, spot gold rose 5.91 per cent to $4,940.99 an ounce after falling about 13 per cent in the prior two sessions. spot silver rose 11.17 per cent to $88.29 an ounce after tumbling 6 per cent in Monday’s session and 27 per cent on Friday.
"The market has been pretty worried, at least taking a hawkish bias to Kevin Warsh being nominated as the Fed Chair," said Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers.
"We’re finally taking a deep breath and saying maybe we overreacted, let’s chill out a little bit here. We’re seeing a little bit of calmness returning back to the markets on the commodity side looking at gold and silver."
Investor sentiment was choppy, however, with the CBOE volatility index suddenly rallying near the end of the first half hour of the U.S. stock market session.
In AI industry news, Nvidia shares were the biggest weight on Wall Street after Reuters reported that ChatGPT developer OpenAI has been seeking faster alternatives to Nvidia’s artificial intelligence chips. Chipmaker AMD and server equipment company Super Micro Computer were due to report after the market close.
On Wall Street the S&P 500 and the Nasdaq had opened higher but lost ground quickly with software stocks weighing due to concerns about AI competition. By 11:16 a.m. (1616 GMT), the S&P 500 <.SPX> fell 32.07 points, or 0.46 per cent, to 6,944.37 and the Nasdaq Composite <.IXIC> fell 239.39 points, or 1.01 per cent, to 23,352.71. The Dow Jones Industrial Average rose 42.46 points, or 0.09 per cent, to 49,450.12.
MSCI’s gauge of stocks across the globe <.MIWD00000PUS> rose 2.71 points, or 0.26 per cent, to 1,046.48.
The pan-European STOXX 600 <.STOXX> index was flat, after hitting a record high earlier.
In currencies, the greenback took a step back after last week’s rally against a range of currencies. The Australian dollar strengthened 1.02 per cent to $0.7018. after the Reserve Bank of Australia raised rates by a quarter point to 3.85 per cent, citing above-target inflation and a tight labour market.
The dollar index <=USD>, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.14 per cent to 97.41, with the euro up 0.2 per cent at $1.1813.
Against the Japanese yen , the dollar strengthened 0.09 per cent to 155.74.
Oil prices regained some ground on Tuesday, after falling over 4 per cent in the previous session, as market participants considered the global supply outlook and the possibility of a de-escalation in U.S.-Iran tensions.
U.S. crude rose 1.08 per cent to $62.81 a barrel and Brent rose to $66.90 per barrel, up 0.9 per cent on the day.
In U.S. Treasuries, yields rose slightly on Tuesday as traders evaluated possible shifts in Federal Reserve policy under Kevin Warsh while traders faced U.S. economic data delays due to a partial government shutdown.
The yield on benchmark U.S. 10-year notes rose 1 basis points to 4.287 per cent, from 4.277 per cent late on Monday, while the 30-year bond yield rose 0.8 basis points to 4.917 per cent.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 1.6 basis points to 3.586 per cent, from 3.57 per cent late on Monday.