Gold and silver climbed to all-time highs as investors continued their rush into physical assets, and oil prices hit a four-month top as US President Donald Trump warned Iran of possible attacks if it did not make a deal on nuclear weapons.
The US Federal Reserve (Fed) left interest rates alone as widely expected, while chair Jerome Powell talked of a “clearly improving” economic outlook and broad support on the committee for a pause.
Powell would not be drawn on whether he would remain as a governor after he steps down as chair in May, given Trump’s efforts to pressure the Fed into more aggressive cuts.
Investors reacted by further paring the chance of another policy easing by April to 26%, with June seen as the next likely window at 61%.
In the meantime, investors have been counting on earnings to keep equities in demand and Samsung Electronics duly obliged by tripling its operating profit as the race to build AI capability sent chip prices surging.
South Korea stocks rose 0.6%, bringing gains for January so far to a thumping 23%.
The tech-heavy Taiwan market is up almost 13% in the same time period.
Japan’s Nikkei edged up 0.2%, having been held back by wild swings in the yen and a steep rise in bond yields at home.
MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed.
Indonesia’s market suffered a second session of painful losses after index provider MSCI warned about ownership and trading transparency, leading Goldman Sachs to cut its rating on the country’s equities.
AI capex vs earnings
In Europe, EUROSTOXX 50 futures and DAX futures firmed 0.1%, while FTSE futures rose 0.2%.
On Wall Street, S&P 500 futures were flat and Nasdaq futures added 0.2% as disappointment over Microsoft warred with strong guidance from Meta.
Microsoft’s shares slid 6.5% in extended trading amid concerns its massive capex spending would not make enough of a return to justify its sky-high valuation.
Yet, Meta lifted its outlook for revenues and capex for 2026, sending its shares up 8% after hours and adding around US$140 billion to its market value.
“A common theme so far from META and MSFT is the larger-than-expected capex spending, indicating the upward momentum for AI spending,” noted analysts at JPMorgan.
The difference, they added, was Meta also sharply raised its 2026 revenue outlook to well above market expectations.
All eyes were now on Apple results, where JPMorgan expected earnings to beat consensus driven by stronger iPhone 17 demand and slower growth in expenses.
The bank raised its end 2026 price target to US$315, from US$305.
Over in currency markets, the dollar was on the defensive as investors hedged against US policy uncertainty and the country’s ever-growing mountain of debt.
Official comments offered only limited support. US treasury secretary Scott Bessent insisted the administration still favoured a “strong dollar” policy after Trump seemed to condone a weaker currency.
European leaders voiced concerns at the dollar’s slide, while officials at the European Central Bank (ECB) suggested a further steep rise in the euro could warrant cuts in interest rates.
The euro added another 0.3% to US$1.1985, while the dollar lost 0.3% on the Swiss franc to CHF0.7653.
It also dipped 0.3% on the Japanese yen to ¥153.03.
“Further dollar weakness would increase the likelihood of the ECB and other central banks cutting interest rates, as well as emerging markets repeating last year’s outperformance,” said Jack Allen-Reynolds, an economist at Capital Economics.
The decline in the dollar has further encouraged demand for hard assets, with gold, silver and copper all zooming higher.
Gold added 2.7% to US$5,546 an ounce, bringing its gains for this month alone to 28%.
Oil prices extended their recent rally on worries any US military action against Iran could hamper global supplies.
Brent added 1.3% to US$69.33 a barrel, while US crude rose 1.5% to US$64.13 per barrel.