Stocks, bitcoin regain some ground along with precious metals
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NEW YORK/ LONDON, Feb 6 : MSCI's global equities gauge was advancing solidly on Friday after falling in five of the last six sessions, while bitcoin also attempted a comeback from its sharp selloff and spot gold and silver attempted to regain some lost ground.
Oil prices were choppy on Friday as investors monitored talks between the United States and Iran that took place in Oman as they assessed the possibility of a supply-disrupting Middle East conflict.
An equities rally on Wall Street boosted the global index as investors crept back into U.S. technology stocks after a massive selloff in the prior three sessions on fears around spending and competition disruption related to the artificial intelligence boom.
AMAZON SPENDING PLAN INFLATES AI TOTAL
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Amazon.com shares fell sharply after it announced massive spending plans late on Thursday, upping the total for an estimated combined 2026 AI spending spree from Amazon, Microsoft, Alphabet and Meta Platforms to $600 billion. Spending fears have been colliding with worries about AI disruption in the software and data services sectors.
For the S&P's bounce on Friday, Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut pointed to technical buying since the benchmark index hit its 100-day moving average on Thursday, adding to some support from bitcoin's turnaround and investor reconsideration of AI fears.
"The market looks like it was getting a bit overdone to the downside so you're seeing a rebound in technology and some industrials and financials stocks. It was a healthy sell-off," said Pavlik, also suggesting investor recalculation of when AI disruption to the software industry would materialize.
"Maybe in the future, but it's not happening right away and the realization that this is not something that's happening today brought a little bit cooler heads to the market," he said.
On Wall Street at 12:10 p.m. ET (1710 GMT) the Dow Jones Industrial Average rose 989.72 points, or 2.02 per cent, to 49,898.44, the S&P 500 rose 106.21 points, or 1.56 per cent, to 6,904.61, and the Nasdaq Composite rose 380.46 points, or 1.69 per cent, to 22,921.04.
MSCI's gauge of stocks across the globe rose 12.88 points, or 1.25 per cent, to 1,040.12, while the pan-European STOXX 600 index rose 0.89 per cent.
CRYPTO, PRECIOUS BOUNCE
Cryptocurrencies managed to staunch a bruising selloff for now after a wipeout on Thursday, which was part of a larger decline that has knocked $2 trillion in value from the market since October.
"Whether or not this bounce continues is questionable. It's brought some questions into bitcoin as a store of value and the relative safety that it brings but, when it bounces, you don't get the margin calls like you would probably be getting when its selling off," said Pavlik.
Precious metals markets saw gold advancing with help from bargain hunting, a slightly weaker dollar and lingering concerns over U.S.-Iran talks in Oman. Silver recovered from a 1-1/2-month low.
Spot gold rose 3.96 per cent to $4,959.28 an ounce while U.S. gold futures rose 1.84 per cent to $4,951.00 an ounce. Spot silver rose 7.77 per cent to $76.77 an ounce.
SURVEY SHOWS IMPROVEMENT IN US CONSUMER SENTIMENT
In currencies, the dollar pared some losses against Japan's yen after a U.S. survey showed that consumer sentiment improved marginally in early February amid lingering worries about the labor market and the rising cost of living.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.31 per cent to 97.66, with the euro up 0.32 per cent at $1.1814.
Sterling strengthened 0.61 per cent to $1.3608 after selling off sharply on Thursday.
Against the Japanese yen, the dollar strengthened 0.04 per cent to 157.1, with Japanese markets set to come back into focus as investors keep a close eye on Sunday's election, in which Prime Minister Sanae Takaichi aims to strengthen her majority in parliament. Japanese stocks ended the week higher, with the Nikkei 225 up 0.8 per cent.
In U.S. Treasuries, two-year U.S. Treasury yields hit a more than three-month low before turning higher, following a sharp decline on Thursday when unexpectedly weak labor market data raised concerns that the jobs market is worsening faster than thought.
On the U.S. monetary policy front, traders were betting on an increased likelihood compared with a day ago for a March rate cut by the Federal Reserve, though the majority were still betting that the central bank would keep rates steady, according to the CME Group's FedWatch tool.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.3 basis points to 3.506 per cent, from 3.483 per cent late on Thursday.
The yield on benchmark U.S. 10-year notes rose 0.8 basis points to 4.218 per cent while the 30-year bond yield rose 0.2 basis points to 4.8653 per cent.
In energy markets, oil prices were higher even though Iran’s top diplomat said nuclear talks with the U.S. mediated by Oman were off to a “good start” and set to continue.
U.S. crude rose 1.45 per cent to $64.21 a barrel and Brent rose to $68.58 per barrel, up 1.52 per cent on the day.
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