Wall Street saw a day of choppy trading on Thursday, with stocks managing to end higher despite early volatility driven by a wave of major corporate earnings. The Dow Jones Industrial Average gained over 150 points, supported by strong results from IBM and Las Vegas Sands, while the S&P 500 and Nasdaq also posted gains, though Microsoft’s post-earnings slump weighed on tech sentiment. Investors digested a mixed set of economic indicators, including weaker-than-expected US GDP growth and declining Treasury yields, while concerns over fresh US tariff threats on Canadian and Mexican imports kept markets on edge.

Key Takeaways:

  • Dow Gains in Volatile Session: The Dow Jones Industrial Average rose 168.61 points, or 0.38%, to close at 44,882.13, after earlier climbing nearly 300 points at session highs. The blue-chip index rebounded after a rocky start, lifted by strong earnings from companies like IBM and Las Vegas Sands. 
  • S&P 500 and Nasdaq Post Gains Despite Tech Weakness: The S&P 500 added 0.53%, closing at 6,071.17, as investors navigated through a mix of strong corporate earnings and macroeconomic uncertainty. The Nasdaq Composite edged up 0.25%, settling at 19,681.75, though it struggled to maintain momentum due to a 6.2% drop in Microsoft shares following a disappointing revenue forecast. Despite this, Meta Platforms (+1.6%) and Tesla (+2.9%) helped limit losses, as their earnings reports were better received by investors.
  • US GDP Growth Misses Expectations, While Unemployment Declines: The US economy expanded at an annualised rate of 2.3% in the fourth quarter of 2024, missing the 2.5% forecast by economists. Meanwhile, US weekly jobless claims fell by 16,000 to 207,000, lower than the expected 220,000, suggesting continued labour market strength. The unemployment rate remained at 4.1% in December. The US economy expanded at an annualised rate of 2.3% in the fourth quarter of 2024, missing the 2.5% forecast by economists.
  • Treasury Yields Slide as Growth Concerns Persist: US Treasury yields moved lower following the weaker-than-expected GDP report, with the 10-year yield dropping 3 basis points to 4.526%, while the 2-year yield fell 1 basis point to 4.213%. 
  • European Markets Hit Record Highs After ECB Rate Cut: European equities surged on Thursday as the European Central Bank (ECB) cut interest rates by 25 basis points, bringing the key deposit facility rate down to 2.75%. The pan-European Stoxx 600 gained 0.9% to close at 539.06, reaching an all-time high. The FTSE 100 climbed 1.04% to 8,646.88, while the CAC 40 in France added 0.94%. Italy’s FTSE MIB advanced 0.2% to 34,433, marking its second consecutive day of gains. Investors welcomed the ECB’s easing measures despite concerns over slowing economic growth in the eurozone.
  • Eurozone Economic Growth Stalls as Germany and France Contract: The Eurozone GDP remained unchanged quarter-over-quarter and grew 0.9% year-over-year, falling short of expectations for 0.1% quarterly growth. Germany’s economy shrank by 0.2% in Q4, more than the 0.1% contraction predicted, while France also recorded a 0.1% decline in GDP. Meanwhile, Spain’s CPI rose 0.2% month-over-month and 3.0% year-over-year, slightly exceeding forecasts.
  • Asian Markets Post Gains as Global Volatility Continues: While US markets remained volatile, Asian stocks displayed resilience. Japan’s Nikkei 225 rose 0.25% to 39,513.97, supported by gains in semiconductor stocks like Advantest (+3.22%) and Tokyo Electron (+1.87%). Meanwhile, Toyota shares climbed 0.65% after the automaker reported 10.8 million vehicle sales in 2024, retaining its position as the world’s top-selling carmaker for the fifth consecutive year. Australia’s S&P/ASX 200 also gained 0.55% to 8,493.70, hitting its highest level since December 2024, as stronger-than-expected export price index growth (+3.6% in Q4) boosted sentiment.
  • Oil Prices Edge Higher but Face Headwinds from US Tariff Threat: Crude oil prices saw modest gains on Thursday but remained under pressure amid concerns over potential US tariffs on Canadian and Mexican crude imports. Brent crude rose $0.49 or 0.64%, settling at $77.07 per barrel, while West Texas Intermediate (WTI) crude climbed $0.51 or 0.52%, to $73.13 per barrel. 

FX Today:

  • Euro Struggles to Hold Ground as Growth Concerns Weigh: The EUR/USD pair declined to 1.0406, down 0.14% for the day, as weak Eurozone GDP data weighed on sentiment. Flash figures showed that the Eurozone economy stagnated in Q4, while Germany (-0.2%) and France (-0.1%) both recorded contractions, reinforcing concerns about slowing growth. The 50-day SMA at 1.0426 is providing some support, but the 100-day and 200-day SMAs at 1.0667 and 1.0769, respectively, remain distant resistance levels. A break below 1.0380 could extend losses toward 1.0300, while a move above 1.0450 is needed to shift sentiment in favour of bulls.
  • British Pound Struggles to Gain Traction as Dollar Holds Firm: The British pound edged lower against the US dollar, with GBP/USD falling to 1.2433, down 0.13% on the day. The session saw limited movement, with a high of 1.2442 and a low of 1.2408, highlighting weak bullish momentum. The 50-day SMA at 1.2515 serves as immediate resistance, while the 100-day and 200-day SMAs at 1.2782 and 1.2791 provide longer-term resistance zones. If GBP/USD breaks below 1.2400, further downside toward 1.2350 and 1.2300 is likely. On the upside, a push above 1.2500 would be necessary to confirm a short-term reversal.
  • Japanese Yen Strengthens as Diverging Central Bank Policies Take Hold: The Japanese yen extended its gains as there was a divergence between the Bank of Japan (BoJ) and the Federal Reserve, favouring the yen’s appreciation. USD/JPY declined to 154.22, losing 0.62% on the day. The session saw a high of 155.18 and a low of 153.78, reflecting increased yen strength. The 50-day SMA at 154.85 acts as immediate resistance, while the 100-day and 200-day moving averages at 151.86 and 152.80, respectively, offer medium-term support. The RSI is approaching neutral levels, suggesting further downside potential. A break below 153.50 could accelerate selling toward the 152.50 area. If buyers return, the next key resistance remains at 156.00.
  • Canadian Dollar Stalls Amid Market Uncertainty and Tariff Concerns: The Canadian Dollar continues to trade in a tight range against the US Dollar. USD/CAD strengthened to 1.4493, up 0.55% for the session. The pair traded between 1.4414 and 1.4593, marking another session of higher highs. The 50-day SMA at 1.4267 remains a critical support level, while the 100-day and 200-day SMAs at 1.4007 and 1.3841 indicate a firmly bullish structure. The RSI is in overbought territory, raising the possibility of a pullback. Key resistance lies at 1.4500, and a breakout above this could trigger a move toward 1.4600 and 1.4700. However, if the pair reverses lower, 1.4400 and 1.4300 serve as the first downside targets. The bullish trend remains intact as long as USD/CAD stays above 1.4250. A failure at 1.4500 could lead to a short-term consolidation.
  • Gold Hits New Record High as Investors Seek Safety: Gold extended its bullish momentum, closing at $2,794, up 1.31% for the day. The metal traded between $2,756 and $2,798, maintaining its upward trend amid strong safe-haven demand. The 50-day SMA at $2,668 is providing solid support, while the 100-day and 200-day SMAs at $2,663 and $2,528, respectively, suggest underlying strength. The daily RSI is nearing overbought levels, indicating possible consolidation or a short-term pullback. Immediate resistance is seen at $2,800, and a breakout above this could open the door toward the $2,850 region. On the downside, initial support is located at $2,750, followed by $2,700.

Market Movers:

  • IBM Surges on Strong Cash Flow Forecast: Shares of International Business Machines (IBM) jumped more than 12%, leading gains in both the S&P 500 and the Dow Jones Industrials. The rally came after the company projected full-year free cash flow of $13.5 billion, surpassing analyst expectations of $12.92 billion. 
  • Las Vegas Sands Rallies Following Revenue Beat: Casino and resort operator Las Vegas Sands (LVS) soared over 11% after reporting fourth-quarter net revenue of $2.90 billion, exceeding consensus estimates of $2.86 billion. 
  • UPS Plunges on Weak 2025 Revenue Forecast: United Parcel Service (UPS) saw its stock tumble more than 14%, making it the biggest loser in the S&P 500. The shipping giant issued a disappointing revenue forecast for 2025, expecting sales of $89 billion. 
  • ServiceNow Sinks After Revenue Miss and Soft Guidance: Shares of ServiceNow (NOW) fell more than 11% after the company reported fourth-quarter adjusted revenue of $2.95 billion, slightly below the expected $2.96 billion.
  • Comcast Slides on Broadband Subscriber Losses: Comcast Corp (CMCSA) declined 11%, leading losses in the Nasdaq 100, after the company reported a larger-than-expected decline in broadband customers. 
  • Caterpillar Declines Over 4% on Demand Concerns: Caterpillar (CAT) dropped more than 4% after warning that its 2025 revenues would likely be “slightly lower” due to softer demand. The cautious outlook weighed on the stock, as investors reassessed expectations for the industrial giant’s future performance.

Markets ended the session on a volatile note, with the Dow gaining 168 points, while the S&P 500 and Nasdaq edged higher, despite weakness in Microsoft dragging tech stocks. Economic data showed US GDP growth slowed to 2.3%, missing expectations, while Treasury yields declined, reflecting concerns over future growth. In Europe, stocks hit record highs after the ECB’s fifth consecutive rate cut, even as economic activity remained sluggish. Gold surged to a new record near $2,800, while oil prices saw modest gains, constrained by trade concerns over potential US tariffs on Canadian and Mexican crude. Investors now turn their attention to Friday’s PCE inflation data and upcoming tech earnings, which could shape market direction in the days ahead.