Global markets stabilised after recent bouts of volatility. In the US, major indexes climbed sharply with the Dow rising 1.1% and the S&P 500 up 0.5%, snapping recent losing streaks as earnings surprises and solid macro data lifted sentiment and decreased uncertainty. Tech and consumer stocks helped underpin gains, even as precious metals continued their wild swings after a record run.
In Europe, key benchmarks extended advances, with the FTSE 100 closing at a record high, led by retail, banking and travel sectors a contrast to the sharp sell-off in gold and silver that has rattled commodity markets.
United States: Refooting After Metal Sell-Off
US equities rebounded strongly after recent commodity-led pressure. The S&P 500 broke its three-day losing run, while the Dow and Nasdaq climbed, led by tech and industrial names. Cheaper oil prices boosted travel and leisure stocks.
Precious metals continued to weaken, with gold and silver prices extending recent losses part of the sharpest contraction in silver ever and in gold since the 1980’s following speculation around a more orthodox Federal Reserve stance under a prospective new chair.
In the face of stronger macro data, treasury yields ticked higher this continues to reinforce a narrative that rate cuts may be further delayed, reinforced by the fed holding rates in their last meeting on the 28th of January. This places even more pressure safe havens like gold.
Europe: Equities Strong Despite Metals Weakness
European markets delivered broad gains, the FTSE 100 and STOXX Europe 600 hitting record highs as investors rotated into cyclicals and defensive names after the metals sell-off and after uncertainty of US foreign and trade policy went away. Retailers, banks and travel stocks outperformed, offsetting pressure in commodity exposed miners.
The divergence between equity performance and commodity markets may suggest ongoing cross-asset recalibration, where risk appetite improves in equities even as long-duration and hard asset plays adjust to changing rate expectations.
New EU trade deals with India also served as a strong tailwind especially in export heavy stocks as India is slashing its tariff rate.
Asia & ASX: Cautious Rebound
Asian bourses were mixed, with some regional markets weaker amid the metals slump and profit taking, while others steadied on rebounds out of U.S. leads. South Korea’s Kospi notably struggled.
In Australia, ASX 200 futures pointed higher early, supported by the US lead and anticipation of the Reserve Bank of Australia’s interest rate decision after inflation ticked up in December. Commodities remain the wild card: ongoing volatility in gold and other metals has weighed on resource sectors but defensive and financial stocks showed relative support.
Commodities: Metals Continue Wild Swings
Gold and silver extended their sharp pullback in the face of historic and record declines as markets continue digest and price in interest-rate expectations and reduce crowded safe-haven positioning especially as global uncertainty continues to subside. The sell-off was driven less by a deterioration in macro conditions and more by higher real yields, a firmer US dollar, and profit-taking after an outsized rally late last year.
Treasury yields edging higher and expectations for more Fed easing being pushed out, the opportunity cost of holding non-yielding assets rose, prompting systematic and momentum-driven selling. Silver, which has a larger industrial demand component and saw its sharpest decline in history. It also came under additional pressure as growth-sensitive commodities weakened alongside base metals.
Futures price performance, continuous contracts
Oil prices also fell on easing geopolitical tensions, contributing to broader commodity weakness and impacting energy-linked equities.
What To Watch Today
- Rate decision: The RBA will announce its first interest rate decision of 2026 today at 2:30 PM AEDT. With inflation ticking higher in December. Rates are expected to potentially increase its current 3.60%.
- Treasury yields: Continued strength or volatility in US yields could reshuffle asset preferences across global risk assets.
- Commodities pricing: Whether the metals sell-off stabilises or deepens will be a key barometer of risk sentiment beyond equities.
- FX flows: Dollar strength or weakness trends will continue to influence commodity and equity price action.