The futures market for major U.S. indices suggests a downturn at Thursday's opening, as equities seem poised to relinquish some of the recent gains achieved after strong performances. This shift might be attributed to traders opting to capitalize on the recent market rally, which effectively counterbalanced an earlier decline this month.
On Wednesday, the S&P 500 achieved a new intraday peak before modest setbacks, while the Nasdaq edged closer to its previous record levels. However, persistent concerns over President Donald Trump's proposed tariff policies could potentially affect Wall Street's momentum.
President Trump is set to provide the keynote address at the World Economic Forum in Davos, Switzerland, later today.
U.S. markets closed on a strong note on Wednesday, buoyed by positive earnings reports and corporate developments, alongside sustained optimism regarding anticipated interest rate reductions by the Federal Reserve this year. Despite ongoing tariff concerns, investors largely dismissed these anxieties, continuing to invest in stocks.
The key indices concluded the session robustly, particularly the tech-centric Nasdaq, which benefitted from encouraging earnings and sales projections from Netflix as well as Trump's artificial intelligence initiative. The Dow Jones Industrial Average rose 130.92 points, or 0.3%, to close at 44,156.73. The S&P 500 increased by 37.13 points, or 0.6%, ending at 6,086.37, while the Nasdaq advanced by 252.56 points, or 1.3%, to 20,009.34.
Trump's proclamation of a $500 billion AI infrastructure investment plan, backed by Oracle, OpenAI, and SoftBank, set a favorable environment for tech stocks. Oracle shares soared nearly 7%, NVIDIA increased by around 4.2%, Microsoft rose by nearly 4%, and Meta Platforms ended with a 2.7% gain.
Netflix soared nearly 10% after reporting a record 19 million new subscribers in the fourth quarter, marking the largest subscriber increase in any quarter to date. Netflix's net income for the quarter was $1.869 billion, or $4.27 per share, compared to $938 million, or $2.11 per share, the previous year.
Other significant gainers included Amazon, Eli Lilly, Procter & Gamble, Salesforce, Cisco Systems, American Express, Analog Devices, and Nike, each rising by 1% to 2%.
Conversely, Pfizer, Booking Holdings, Morgan Stanley, Merck, Chevron Corporation, Bank of America, Johnson & Johnson, Tesla, and Exxon Mobil Corporation experienced notable declines.
**Commodities and Currency Markets**
Crude oil futures have modestly increased by $0.05 to $75.49 per barrel after a $0.39 decrease to $75.44 per barrel on Wednesday. In contrast, gold futures have dropped $26.60 to $2,744.30 per ounce following an $11.70 rise to $2,770.90 per ounce in the previous session.
In currency markets, the U.S. dollar is trading slightly lower at 156.20 yen, compared to 156.53 yen at Wednesday's close in New York. Against the euro, the dollar stands at $1.0405, marginally lower than the prior $1.0409.
**Asia**
Asian markets displayed mixed performance on Thursday, despite China's introduction of several measures to support its stock markets. Investors are keenly awaiting announcements on tariffs from the Trump administration and major central bank policy decisions in the upcoming weeks.
In Asian trading, the dollar weakened, gold remained stable close to a three-month high, and oil prices fell amidst signs of increased U.S. stockpiles.
China's Shanghai Composite Index rose by 0.5% to 3,230.16, as Beijing announced plans to guide large state insurers and commercial insurance funds to increase investments in the A-share market. The country's securities regulator also pledged efforts to boost cross-border investment and financing.
However, the Hang Seng Index in Hong Kong dipped 0.4% to 19,700.56, surrendering early gains.
In Japan, markets rose significantly on optimism surrounding AI spending and ahead of CPI data and the impending Bank of Japan rate decision due Friday. The Nikkei 225 Index climbed 0.8% to 39,958.87, and the broader Topix Index increased by 0.5% to 2,751.74. SoftBank Group experienced a 5.1% surge, continuing gains after the White House's acknowledgment of the Stargate AI infrastructure plan.
In Seoul, stocks declined sharply following reports that South Korea's economy showed minimal growth in the fourth quarter of 2024 amid a severe political crisis. The Kospi lost 1.2%, closing at 2,515.49, with chipmaker SK Hynix dropping 2.7% despite reporting record quarterly profits.
Australian markets fell considerably, breaking a three-day winning streak, as losses in mining and consumer discretionary sectors led declines.The benchmark S&P/ASX 200 Index declined by 0.6% to reach 8,378.70, while the broader All Ordinaries Index also fell by 0.6%, closing at 8,629.10. Notable decreases were observed in the stock prices of BHP, Rio Tinto, and Fortescue Metals, which dropped by 1% to 2%.
Iluka Resources experienced a significant dip of 6.5% following a reduction in its shareholding by Perpetual. In contrast, Myer saw a notable surge of 6.1%. However, Premier Investments lost 0.7% after the companies announced a merger agreement.
On the other side of the Tasman, the S&P/NZX-50 Index in New Zealand saw a slight rise of 0.2%, closing at 13,060.08.
**Europe**
European market indices showed little movement, with a slight upward trend on Thursday, following the implementation of measures by China to inject capital into its stock markets. Investors remained cautious amidst ongoing uncertainties concerning U.S. President Donald Trump's proposed tariffs, with many looking forward to his speech at the World Economic Forum in Davos, Switzerland, for further insights.
Specifically, the French CAC 40 Index increased by 0.5%, the German DAX Index rose by 0.3%, and the U.K.'s FTSE 100 Index edged up by 0.1%.
In corporate developments, Puma shares suffered a sharp decline after the German sportswear company announced cost-reduction measures in response to a decline in operational profit, as indicated by preliminary results. Similarly, Associated British Foods' shares dipped after it revised its sales growth forecast downward for its Primark brand. Essity, the Swedish hygiene products manufacturer, also faced a downturn, with its fourth-quarter core earnings falling short of market expectations.
Additionally, IG Group Holdings, a British online trading firm, saw its shares fall despite reporting a 30% increase in first-half profits. Conversely, Sandvik AB's shares rose significantly following the announcement of a modest increase in its fourth-quarter net income.
**U.S. Economic News**
Following an earlier report of a recovery in first-time claims for U.S. unemployment benefits, the Labor Department revealed on Thursday that initial jobless claims increased further in the week ending January 18th. The claims rose to 223,000, up by 6,000 from the unrevised figure of 217,000 for the previous week, slightly exceeding economists' expectations of an increase to 220,000.
This uptick signifies a continued recovery in jobless claims after they had reached an eleven-month low in the week ending January 4th. The report also noted a minor rise in the four-week moving average, which increased by 750 to 213,500 from the unchanged average of 212,750 for the prior week.
At 11 am, the Treasury Department is set to disclose information about this month's auctions of notes with two-year, five-year, and seven-year maturities.
At 12 pm ET, the Energy Information Administration is expected to publish its report regarding crude oil inventories for the week ending January 17th. Forecasts anticipate a decrease of 2.1 million barrels, following a decline of 2.0 million barrels in the previous week.
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