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Index Update

US stocks rallied on Thursday, shrugging off stronger-than-expected inflation data, as President Trump's decision to review reciprocal tariffs eased trade worries. The S&P 500 climbed 1%, the Nasdaq 100 gained 1.4%, and the Dow rose 343 points (0.7%), with tech stocks leading the gains.

Market Movers

Tesla jumped 5.7%, Nvidia rose 3.2%, and Apple gained 2% after CEO Tim Cook teased a new product. However, defense stocks weakened as Trump proposed halving defense spending, sending Lockheed Martin, Northrop Grumman, General Dynamics, and Huntington Ingalls down 1.7%, 3.5%, 2%, and 1.6%, respectively.

Macro Update

The dollar index plummeted to a near two-month low, dipping below 107, as easing trade concerns and delayed reciprocal trade tariffs alleviated fears of an imminent trade war. Despite a hotter-than-expected producer inflation report, the dollar's decline may boost exports, but also risks higher import costs and inflation, keeping investors vigilant about its impact on the broader economy. China's banking sector extended a record CNY 5.13 trillion in new yuan loans in January 2025, surpassing forecasts and the previous record set in January 2024. This surge in lending, combined with a record high in total social financing, indicates a strong start to the year for China's economy. The front-loading of loans by lenders to secure high-quality customers and expand market share drove this growth, setting a positive tone for the country's credit expansion.

Commodity Update

Gold and silver prices surged on Friday, with gold nearing $2,938 per ounce and silver trading above $32 per ounce, driven by a weaker dollar and easing trade concerns. Meanwhile, WTI crude oil futures rose to around $71.6 per barrel, supported by rising fuel demand and the delayed implementation of US trade tariffs.

Futures Update

US stock futures held steady on Friday, building on Thursday's rally sparked by President Donald Trump's decision to review reciprocal tariffs without immediate action. Despite stronger-than-expected inflation reports, investors remain optimistic, betting on a milder personal consumption expenditures price index reading. Positive corporate earnings from major companies, including Applovin, Robinhood, and Coinbase Global, further fueled the bullish momentum, as market participants await US retail sales data to gauge the economy's strength.

Following a strong rebound on Thursday, the stock market continued its recovery from Wednesday's downturn. The Nasdaq Composite spearheaded the gains, closing up 1.5% at 19,945.64, while the S&P 500 rose 1.0% to 6,115.08. Technical indicators suggest a potential near-term upward trend for the S&P 500, as it bounced off the lower boundary of its upward channel. The rebounding Relative Strength Index (RSI) further reinforces this positive outlook. Market participants are now closely observing 6,170 as a key resistance level and 6,050 as a crucial support level.

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