S&P notches record close on tech boost

General market commentary

U.S. equity markets mostly saw gains on Tuesday, with the S&P 500 hitting a new all-time high, rising by 0.4% to settle at 6,978.6. The technology sector led the charge, up 1.4%, and was bolstered by strong performances from major tech names like Amazon, Microsoft, and Nvidia. The Nasdaq Composite also climbed 0.9%, extending its winning streak to five days. Meanwhile, the Dow Jones Industrial Average was the only major index to close lower, slipping by 0.8%, weighed down by poor performance in healthcare shares, particularly UnitedHealth Group, which was affected by disappointing Medicare Advantage payment rate projections for 2027. Tariff policy also remained in the spotlight, with President Trump threatening to raise tariffs on select imports from South Korea, though the impact on the broader market was minimal, as evidenced by South Korea's KOSPI rising nearly 3%.

On the economic front, the Conference Board's Consumer Confidence Index fell to 84.5, the lowest level since May 2014, reflecting concerns over inflation and the labour market. In the bond market, Treasury yields remained relatively flat, with the 10-year yield around 4.23%. The focus now shifts to the Federal Reserve's two-day meeting, with markets expecting the Fed to hold its benchmark lending rate steady at 3.5%–3.75%. With strong economic data and inflation trending lower, analysts believe the Fed could start cutting rates in mid-2026. Corporate earnings are also in full swing, with major companies like Microsoft, Meta Platforms, and Tesla scheduled to report their results today, alongside many others throughout the week.

Latest market and economic update

Most Asian equities rose on Wednesday, driven by optimism surrounding U.S. tech earnings and AI demand. South Korea’s KOSPI and Hong Kong’s Hang Seng led the gains, while Japan’s Nikkei fell, pressured by a stronger yen. Investors remained cautious ahead of the Federal Reserve’s interest rate decision later in the day, watching for guidance on future rate cuts.

U.S. equity index futures were largely unchanged overnight, with investors cautious ahead of the Federal Reserve’s interest rate decision and earnings from key tech companies. The S&P 500 hit a record high, while the Dow slipped due to healthcare sector losses. Attention now shifts to the Fed’s policy meeting and earnings from major tech firms.

The U.S. dollar sank to multi-year lows this morning, with investors selling it aggressively after President Trump downplayed its recent decline. The euro surged above $1.20 for the first time since 2021, while the weaker dollar boosted gold and commodity prices. Trump’s comments and U.S. economic policies contributed to the dollar’s slide.

European equities closed higher on Tuesday, with the STOXX 50 up 0.7% and the STOXX 600 rising 0.6%, supported by positive earnings sentiment and the EU-India trade deal. Argenx surged 4% on strong pharma performance, ASML rose 3.4% ahead of earnings, Puma jumped 9.9% after a stake sale, and BBVA gained 2% amid strong banking sector momentum.

The U.S. dollar sank to multi-year lows this morning, with investors selling it aggressively after President Trump downplayed its recent decline. The euro surged above $1.20 for the first time since 2021, while the weaker dollar boosted gold and commodity prices. Trump’s comments and U.S. economic policies contributed to the dollar’s slide.

Oil prices rose on Wednesday, driven by U.S. supply disruptions caused by a winter storm and a weaker dollar. Brent crude reached a near four-month high at $67.66, while WTI rose to $62.53. U.S. oil inventories unexpectedly fell, and traders are anticipating further declines. Focus also remains on U.S.-Iran tensions and the Fed's rate decision.

U.S. President Donald Trump announced he would soon name a new Federal Reserve chair, promising lower interest rates under new leadership. He criticised Jerome Powell, calling him "too late Powell," and reiterated calls for rate cuts. Trump’s pressure on Powell has raised concerns over the Fed's independence, impacting U.S. bonds and the dollar.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

China has approved its first batch of Nvidia H200 AI chips for import, signalling a shift in policy as it balances AI needs with domestic development. The approval, granted during CEO Jensen Huang’s visit, covers several hundred thousand chips and has been allocated to major Chinese internet firms, with others awaiting clearance.

SoftBank Group is in talks to invest up to $30 billion more in OpenAI, potentially raising the company’s valuation to $830 billion. SoftBank’s shares surged over 8% following the news. Already a major shareholder with an 11% stake, SoftBank is also exploring an IPO and courting Middle Eastern sovereign wealth funds and venture capital investors.

LVMH reported a 5% fall in 2025 revenue to €80.8bn as economic and geopolitical pressures weighed on luxury demand. Profit declined despite stronger cash flow, with Europe slowing while the US and Asia improved. Bernard Arnault urged caution for 2026, even as second-half trends stabilised. Fashion and leather goods fell, wines weakened, while retailing performed better.

Boeing swung to a fourth-quarter profit of $8.22 billion, boosted by the $10.6 billion Jeppesen sale, rising 737 MAX and 787 output, and positive free cash flow. Commercial and defence units still posted losses, while a $565 million KC-46 charge and 777X engine issues highlighted ongoing production challenges despite record deliveries and revenue growth.

American Airlines expects 2026 profit above analyst forecasts, driven by stronger demand for premium seats, corporate travel, and loyalty revenue, despite a record winter storm causing over 9,000 cancellations and hitting first-quarter revenue by $150–200 million. Full-year adjusted profit is forecast at $1.70–$2.70 per share, with premium unit revenue outpacing main-cabin growth.

UnitedHealth Group announced a revenue decline for 2026, marking its first in decades, after a lower-than-expected Medicare reimbursement proposal. Shares dropped 19%, and the company is set to lose $60 billion in market value. Despite challenges, CEO Hemsley remains optimistic about a recovery, targeting profit growth and cost cuts for 2026.

Amazon mistakenly sent an email to many Amazon Web Services employees ahead of planned layoffs, announcing job cuts as part of "Project Dawn." The email, sent by senior VP Colleen Aubrey, incorrectly stated that impacted employees in the U.S., Canada, and Costa Rica had been notified. The meeting invite for Wednesday was later cancelled.

Redwire shares surged almost 30% after securing a spot in a Defence Department SHIELD contract worth up to $151 billion to support Trump’s ’Golden Dome’ initiative. The award covers multiple defence work areas, with no guaranteed revenue. Redwire joins other major vendors, including Lockheed Martin, Palantir, Anduril, and Blue Origin.

Lyft is developing a new service for teenagers, allowing them to use rideshare with enhanced safety features, including PIN authentication, audio recording, and real-time tracking for parents. The service will match teens with highly-rated drivers. This marks a policy shift for Lyft, which previously required adult accompaniment for minors.

Pinterest announced a global restructuring plan, including a workforce reduction of less than 15%, as part of a transformation strategy focused on AI-powered products and sales transformation. The company will incur restructuring charges of $35-$45 million, primarily in cash. The plan is expected to be completed by the end of Q3 2026.

Citi has sharply upgraded its silver outlook after prices surged over 30% in two weeks, far exceeding earlier forecasts. The bank now expects a further 30–40% rise, raising its 0–3 month target to $150 an ounce. While extreme scenarios could push prices above $300, Citi considers this highly unlikely, with the rally driven by capital flows, geopolitical risk, and silver outperforming gold.

Wall Street turned bullish on CoreWeave, with DA Davidson and Deutsche Bank upgrading the shares due to improved demand visibility and growth prospects. DA Davidson raised its target to $110, while Deutsche Bank set a $140 target, citing solid fundamentals, secured power, and a growing mix of investment-grade customers.

Reddit faced negative sentiment after Cleveland Research analyst Ross Walthall expressed concerns over moderating growth forecasts for 2026, citing slower new advertiser growth and increasing competition from TikTok and Snap. The firm lowered Reddit's 2026 revenue growth estimate to 36%, below the consensus of 39%, highlighting reduced ROI targets and competitive risks.

Citi launched broad coverage of European pharmaceutical companies with a mixed outlook. It issued Buy ratings on AstraZeneca and Novartis, citing strong growth and pipelines. However, it took a cautious stance on GSK, Novo Nordisk, and Sanofi, highlighting concerns over loss-of-exclusivity events, pricing pressures, and pipeline setbacks for the latter.

Upcoming data and events

On Wednesday, major companies including Microsoft, Meta, Tesla, ASML, IBM, Lam Research, AT&T, GE Vernova, and Amphenol are set to release quarterly results. Investors will also watch the Federal Reserve’s interest rate decision, FOMC statement and press conference, President Trump’s speech, and the weekly EIA crude oil inventory reports for market cues.

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