US markets closed on a mixed note on Friday, as the S&P 500 remained unchanged while the Dow Jones dipped and the Nasdaq saw gains. Investors weighed the latest economic data, including a sharper-than-expected drop in retail sales, while sentiment improved following President Trump’s update on reciprocal tariff plans. Despite Friday’s cautious trading, all three major indices recorded weekly gains, supported by easing inflation concerns and a decline in Treasury yields, which helped offset broader economic worries.

Key Takeaways:

  • S&P 500 Ends Flat but Secures Weekly Gain: The S&P 500 was virtually unchanged on Friday, slipping just 0.01% to close at 6,114.63, as investors assessed the latest economic data and trade developments. Despite the muted finish, the index posted a 1.5% gain for the week.
  • Dow Drops Over 165 Points, Still Gains for the Week: The Dow Jones Industrial Average fell 165.35 points, or 0.37%, to end the session at 44,546.08. The blue-chip index struggled under pressure from weaker-than-expected US retail sales data. Still, the Dow managed to advance 0.6% for the week.
  • Nasdaq Leads the Market with Weekly Surge: The Nasdaq Composite outperformed, rising 0.41% on Friday to close at 20,026.77. The tech-heavy index posted a 2.6% gain for the week, as growth stocks benefited from easing inflation concerns and a drop in Treasury yields. 
  • US Retail Sales Plummet, Raising Growth Concerns: US retail sales fell 0.9% in January, significantly worse than the expected 0.2% decline, raising concerns about consumer spending trends. The previous month’s sales were revised higher to 0.7%, offering some relief, but the sharp drop in January suggests potential economic headwinds. Notable declines were seen in sporting goods, music, and book stores (-4.6%), online retailers (-1.9%), and motor vehicle and parts sales (-2.8%). However, gas stations (+0.9%) and food and drinking establishments (+0.9%) provided some support.
  • Treasury Yields Slide as Investors Weigh Economic Data: The 10-year Treasury yield dropped 5 basis points to 4.472%, while the 2-year yield slipped 6 basis points to 4.25%. The decline followed the weak retail sales report, which signalled potential cooling in consumer spending and eased fears of an overheating economy. 
  • European Markets Extend Weekly Rally Despite Friday Decline: The Stoxx 600 fell 0.24% on Friday, snapping a four-session winning streak, but still posted its eighth consecutive weekly gain, rising 9% year-to-date. The FTSE 100 climbed 0.37% this week to close at 8,732.46, while France’s CAC 40 gained 2.9%, finishing at 8,178 after rising for the fifth consecutive session. The FTSE MIB closed at 37,978, marking its highest level since January 2008. Germany’s DAX struggled, dropping 0.6% on Friday to end at 22,482.5, underperforming its European peers. On the economic front, Eurostat revised Eurozone Q4 GDP growth to 0.1%, slightly improving from earlier stagnation estimates. However, employment growth slowed to 0.1% for the quarter, continuing its downward trend since early 2022. Meanwhile, German wholesale prices rose 0.9% year-over-year in January, while Spain’s EU-harmonised inflation climbed to 2.9%, up from 2.8% in December.
  • Asia-Pacific Markets Mixed as Investors Assess Trade Developments: Asian markets had a mixed session as investors assessed Trump’s reciprocal tariff plan. China’s CSI 300 gained 0.87%, while Hong Kong’s Hang Seng surged 3.48%, extending its gains from the previous session and heading for its best weekly performance since October. In contrast, Japan’s Nikkei 225 dropped 0.79% to 39,149.43, while the Topix lost 0.23% to 2,759.21. South Korea’s Kospi rose 0.31% to 2,591.05, while the small-cap Kosdaq jumped 0.94% to 756.32. India’s Nifty 50 (-0.82%) and BSE Sensex (-0.83%) declined, as investors reacted to softer-than-expected wholesale inflation, which grew 2.31% in January, slightly below forecasts of 2.5%.
  • Oil Prices Slip as Ukraine Peace Deal Hopes Ease Supply Concerns: Crude oil prices edged lower on Friday as investors weighed the potential for a Russia-Ukraine peace deal, which could lead to the lifting of sanctions and increased oil supply. Brent crude fell 0.37% to $74.74 per barrel, while West Texas Intermediate (WTI) declined 0.77% to $70.74 per barrel. Both benchmarks, however, secured weekly gains of about 1%. JPMorgan analysts estimated global oil demand at 103.4 million barrels per day (bpd), an increase of 1.4 million bpd from last year.

FX Today:

  • EUR/USD Rises but Faces Resistance: EUR/USD gained 0.28% to close at 1.0493, with a session high of 1.0513. The pair continues its recovery but struggles to break above the key 1.0500 level. The 50-day moving average stands at 1.0397, while the 100-day and 200-day moving averages are at 1.0589 and 1.0748, respectively. The short-term outlook remains positive, but a failure to breach 1.0520 could lead to renewed selling pressure. Support lies at 1.0450, and a drop below this level might expose the pair to 1.0400. A decisive move above 1.0520, however, could push EUR/USD toward 1.0600.
  • GBP/USD Holds Firm as Sterling Hits Two-Month High: The British pound continued its upward trajectory, with GBP/USD closing at 1.2589, gaining 0.18% for the session. The pair reached a high of 1.2630 before retracing slightly but remains well-supported above 1.2540. The 50-day moving average at 1.2476 provides a solid base, while the 100-day and 200-day moving averages at 1.2697 and 1.2789, respectively, indicate longer-term resistance. A sustained push above 1.2600 could set the stage for a move toward 1.2700. If the pair faces rejection near 1.2630, support is seen at 1.2550, followed by 1.2500. 
  • AUD/USD Extends Gains as US Dollar Weakens: The Australian dollar strengthened for the second consecutive session, with AUD/USD closing at 0.6356, rising 0.63% for the day. The pair reached a high of 0.6367 before pulling back slightly but remains in a positive trend. The 50-day moving average is positioned at 0.6267, with the 100-day and 200-day moving averages at 0.6449 and 0.6558, respectively. The short-term trend remains positive, but a break above 0.6400 is needed to sustain further upside momentum. A drop below 0.6330 could lead to a retest of 0.6300, while a move above 0.6400 may target 0.6450 in the near term. 
  • NZD/USD Recovers as Buyers Step In: The New Zealand dollar rebounded strongly, with NZD/USD advancing 1.00% to close at 0.5735. The pair touched an intraday high of 0.5738, suggesting renewed bullish momentum. The 50-day moving average is at 0.5670, while the 100-day and 200-day moving averages stand at 0.5841 and 0.5974, respectively. The pair must break above 0.5750 for continued upside potential. Support is seen at 0.5700, and a drop below this level could push the pair toward 0.5650. A continued rise above 0.5750 could target 0.5800.
  • Gold Falls Below $2,900 But Ends Week Higher: Gold prices declined sharply on Friday, with spot gold closing at $2,883, down 1.48% for the session. The metal saw an intraday high of $2,940.00 before falling to a low of $2,877.09, reflecting strong volatility. Resistance is seen near $2,930, while strong support lies around $2,880. The 50-day moving average at $2,717.22 continues to provide a solid floor, while the 100-day and 200-day moving averages, positioned at $2,692.53 and $2,558.86, respectively, confirm a bullish structure. If selling pressure persists, gold could test $2,850 in the near term. However, a recovery above $2,910 may reignite bullish sentiment, targeting the $2,950 region. 

Market Movers:

  • WeRide Soars as Nvidia Stake Revealed: Shares of Chinese self-driving technology company WeRide skyrocketed 83.5% after regulatory filings revealed that Nvidia holds a $25 million stake in the company. 
  • Roku Jumps on Strong Earnings Beat: Roku shares surged 14.1% after the streaming company reported fourth-quarter results that exceeded analyst expectations. Roku lost 24 cents per share on revenue of $1.2 billion, beating forecasts of a 40-cent loss per share on revenue.
  • Airbnb Rallies on Earnings Outperformance: Airbnb stock jumped 14.5% after the company posted fourth-quarter earnings of 73 cents per share on revenue of $2.48 billion, surpassing analyst estimates of 58 cents per share and $2.42 billion in revenue.
  • DraftKings Surges on Raised Revenue Outlook: DraftKings shares soared 15.2% after the sports betting company increased the lower end of its full-year revenue guidance. The company now expects revenue between $6.3 billion and $6.6 billion, bringing its midpoint to $6.45 billion, surpassing Wall Street forecasts.
  • Coinbase Drops Despite Strong Earnings: Cryptocurrency exchange Coinbase tumbled nearly 8%, despite reporting earnings per share of $4.68 on revenue of $2.27 billion, ahead of analyst forecasts of $1.81 per share and $1.88 billion in revenue.
  • GoDaddy Falls on Weak Guidance: Online domain registration company GoDaddy saw its shares plummet 14.3% after issuing disappointing revenue guidance for the first quarter, forecasting revenue between $1.175 billion and $1.195 billion, below analyst estimates.

As the trading week came to a close, markets remained mixed, with the S&P 500 holding steady, the Dow slipping over 165 points, and the Nasdaq securing solid weekly gains led by strength in the tech sector. Weaker-than-expected US retail sales data and a continued decline in Treasury yields signalled potential cooling in consumer spending, adding to speculation over future Federal Reserve policy moves. European markets ended the week higher despite a Friday pullback, while Asia-Pacific markets saw varied performances as investors reacted to President Donald Trump’s reciprocal tariffs plan and economic data from key regions. Meanwhile, gold dropped below $2,900 but remained on track for a weekly gain, while oil prices edged lower on renewed Ukraine peace deal hopes.