US markets rallied on Thursday as investor sentiment improved following President Donald Trump’s decision to delay imposing new tariffs, easing fears of escalating trade tensions. The Dow Jones Industrial Average surged more than 340 points, while the S&P 500 and Nasdaq posted strong gains, driven by a robust performance in the technology sector. Nvidia led the charge, rising 3.2% after Hewlett Packard Enterprise announced shipments of its latest AI-powered chip. Meanwhile, fresh inflation data showed a slightly hotter-than-expected increase in producer prices. In response, the 10-year Treasury yield fell by 10 basis points to 4.531%, as investors reacted to the latest inflation data.

Key Takeaways:

  • Dow Surges Over 300 Points as Trade Fears Ease: The Dow Jones Industrial Average jumped 342.87 points, or 0.77%, closing at 44,711.43, as investor sentiment improved following President Donald Trump’s decision to delay new tariffs. The index hit session highs after Trump signed a memorandum to examine reciprocal tariffs but stopped short of implementing any levies.
  • S&P 500 and Nasdaq Rally on Tech Gains: The S&P 500 climbed 1.04%, closing at 6,115.07, while the Nasdaq Composite advanced 1.50% to settle at 19,945.64. The strong performance was fueled by a rally in technology stocks, particularly Nvidia (+3.2%). Tesla also surged 5.9%, and AppLovin soared 24% following strong earnings.
  • US Inflation Data Sparks Mixed Reaction: The Producer Price Index (PPI) rose 0.4% in January, slightly above the 0.3% estimate. However, the core PPI, which excludes food and energy, increased 0.3%, in line with forecasts. Despite the headline figure coming in a little hotter than expected, traders found relief in signs that the Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) Price Index, may not be as severe as previously feared.
  • European Stocks Hit Record Highs Amid Earnings and Ukraine Peace Hopes: The pan-European Stoxx 600 index climbed 1%, with major indices posting strong gains. Germany’s DAX surged 2.14% (+475 points), marking its biggest one-day gain in two years. France’s CAC 40 added 1.54% (+124 points), while Italy’s FTSE MIB rose 0.8%, reaching its highest level since 2008. Optimism over a potential resolution to the Russia-Ukraine war helped lift sentiment. However, the UK’s FTSE 100 underperformed, falling 0.49% (-42.72 points). The UK economy grew 0.1% in the fourth quarter, beating expectations of a 0.1% contraction. Growth was supported by gains in the construction (+0.5%) sector, though industrial production fell 0.8%. The data eased fears of an immediate recession but highlighted persistent economic sluggishness, as GDP per capita declined slightly over the year. 
  • Asia-Pacific Markets Rebound as Australia’s ASX Hits Record High: Asian stocks rallied, defying Wall Street’s previous session losses. Japan’s Nikkei 225 jumped 1.28% to 39,461.47, while the Topix climbed 1.18% to 2,765.59. South Korea’s Kospi surged 1.36% to 2,583.17, with small-cap Kosdaq up 0.55% to 749.28. Hong Kong’s Hang Seng Index gained 0.42%, though China’s CSI 300 dipped 0.38% to 3,905.14. Australia’s S&P/ASX 200 hit an intraday record of 8,575.2, surpassing its previous high, before paring gains to close at 8,540.
  • US Jobless Claims Decline, Labour Market Remains Stable: Initial jobless claims fell by 7,000 to 213,000 for the week ending February 8, below the 215,000 estimate. The number of people receiving continued unemployment benefits dropped by 36,000 to 1.85 million, signalling resilience in the labour market. Meanwhile, nonfarm payrolls rose by 143,000 in January, with the unemployment rate holding steady at 4.0%. 
  • Oil Prices Steady as Tariff Uncertainty and Russia-Ukraine Talks Weigh on Markets: Oil prices fluctuated before closing largely unchanged, as news of potential trade negotiations offset concerns about a supply-demand imbalance. Brent crude settled at $75.02 per barrel (-0.21%), while West Texas Intermediate (WTI) dipped slightly to $71.29 (-0.11%). 

FX Today:

  • EUR/USD Climbs as Bulls Extend Gains: The euro strengthened against the dollar on Thursday, closing at 1.0457, up 0.73% for the session. The pair reached an intraday high of 1.0461 before stabilizing, while support was seen near 1.0382. The 50-day simple moving average at 1.0398 continues to act as a key support level, while the 100-day and 200-day SMAs at 1.0592 and 1.0749, respectively, provide longer-term resistance. If the pair sustains momentum, the next resistance level stands at 1.0480, with a move beyond that potentially targeting 1.0520. On the downside, a drop below 1.0400 could signal further weakness.
  • GBP/USD Rises as UK GDP Beats Expectations: The British pound advanced on Thursday, closing at 1.2555, up 0.90%, following stronger-than-expected UK GDP data. The pair recorded a high of 1.2560 before pulling back slightly but remained well-supported above 1.2433. The 50-day SMA at 1.2478 continues to act as a support level, with the 100-day and 200-day moving averages at 1.2704 and 1.2787 serving as key resistance points. If bullish momentum persists, the next resistance is seen at 1.2600, with an extension toward 1.2650. However, if selling pressure increases, support may be tested at 1.2500 and 1.2450.
  • USD/JPY Reverses Gains, Slides Below Key Levels: The US dollar weakened against the Japanese yen, with the pair closing at 152.79, down 1.05%. After reaching a session high of 154.67, the pair faced strong selling pressure, finding support near 152.70. The recent drop pushed USD/JPY below the 50-day SMA at 155.02, though it remains above the 100-day and 200-day moving averages at 152.98 and 152.70. A further decline below 152.50 could trigger additional losses toward 151.80, while a recovery above 153.50 could see the pair reapproach the 154.00 resistance level.
  • USD/CAD Weakens as Canadian Dollar Gains Strength: The US dollar fell against the Canadian dollar, with USD/CAD closing at 1.4196, down 0.73%. The pair reached a session high of 1.4304 before pulling back, finding support near 1.4195. The drop below the 50-day SMA at 1.4333 suggests increased bearish momentum, with the 100-day and 200-day moving averages at 1.4083 and 1.3877 providing additional support. If the downtrend persists, further losses toward 1.4150 could be seen, with a continuation to 1.4100 if selling accelerates. However, a rebound above 1.4250 could open the door for a retest of resistance.
  • AUD/USD Advances as Traders Assess Trade Policy Risks: The Australian dollar rose against the US dollar, closing at 0.6315, up 0.57%, as risk sentiment improved. The pair recorded an intraday high of 0.6317 before finding support near 0.6254. The 50-day SMA at 0.6268 continues to provide key support, while the 100-day and 200-day moving averages at 0.6451 and 0.6659 remain key resistance levels. If upward momentum continues, AUD/USD could push toward 0.6350, with a further advance targeting 0.6400. On the downside, a drop below 0.6280 could trigger a retest of 0.6250.
  • Gold Extends Rally as Inflation Concerns Persist: Gold prices climbed on Thursday, closing at $2,924, up 0.72%, as inflation concerns and trade tensions increased demand for safe-haven assets. The metal reached an intraday high of $2,929 before stabilising near support at $2,900. The 50-day, 100-day, and 200-day SMAs are positioned at $2,712, $2,690, and $2,556, respectively. Resistance stands at $2,940, where potential profit-taking could occur, while a breakout above this level may push prices toward 2,960. However, a decline below $2,900 could trigger a correction to $2,880.

Market Movers:

  • MGM Resorts Jumps on Strong Quarterly Results: MGM Resorts stock climbed 17.5% after the company announced fourth-quarter revenue of $4.35 billion, beating analyst estimates of $4.27 billion. 
  • Hanesbrands Plummets After Revenue Miss and CEO Departure News: Hanesbrands stock fell 18.5% following the company’s weaker-than-expected fourth-quarter revenue of $888.5 million, below the $899.2 million estimate.
  • West Pharmaceutical Services Crashes on Weak Guidance: West Pharmaceutical Services shares plummeted 38.2% after issuing disappointing full-year guidance. The company expects adjusted earnings to range between $6.00 and $6.20 per share.
  • Trade Desk Tumbles on Disappointing Revenue Forecast: Trade Desk shares plunged 33% after the company reported fourth-quarter revenue of $741 million, missing the estimate of $759 million. 
  • Reddit Declines on Disappointing User Growth: Reddit shares dropped 5.3% after reporting 101.7 million daily active unique visitors in the fourth quarter. While this represented a 39% increase year over year.
  • Dutch Bros Rallies on Strong Earnings and Sales Growth: Dutch Bros shares surged 29.1% after the coffee chain reported fourth-quarter earnings of 7 cents per share, far surpassing analyst estimates of 2 cents per share. 

As markets wrapped up the session, investor sentiment improved following President Donald Trump’s decision to delay new tariffs, pushing the Dow Jones upwards, while the S&P 500 and Nasdaq posted strong gains, led by a surge in tech stocks such as Nvidia and Tesla. European markets climbed to fresh highs, supported by growing hopes of an end to the Russia-Ukraine war, while the FTSE 100 lagged behind due to declines in banking and consumer stocks. Oil prices steadied as traders assessed the impact of trade policy uncertainty and geopolitical developments, while gold extended its rally, closing near $2,924. With inflationary pressures and trade tensions still in focus, all eyes will be on upcoming economic data and central bank signals to gauge the next market moves.