US equity futures are rallying into record territory, led by Tech as overnight earnings (ASML, SK Hynix, STX, TXN) boost the group and help fuel the AI trade, perhaps pausing the broadening theme. As of 8:00am ET S&P futures are up 0.2% pointing to a sixth-straight advance that would mark the longest winning run in almost seven months and will push the S&P 500 cash index above the 7,000 mark for the first time when US markets open; Nasdaq futures surge 0.8, putting the index within touching distance of its October record, with Mag 7s and Semis bid in premarket trading, led by AMD (+2.3%), AVGO (+1.4%), and NVDA (+1.6%). Cyclicals are leading Defensives as Fins/Indu/Mats outperform and Staples lag. Bond yields are flat while the dollar advanced 0.2%, snapping a four-day slide that left the currency at its lowest level in nearly four years. Commodities are mixed: gold +1.7% and silver +0.4% to new record highs, as the Energy complex is under pressure (natgas -8%) with Ags maintaining a bid. Today’s macro focus is on the Fed unchanged announcement (full preview here) with the market looking to see if the Fed identifies growth or inflation as the biggest risk but with no moves expected and three Mag7 earnings releases (full preview here).

In premarket trading, semiconductor, memory and storage stocks rally after positive results from ASML, Seagate and Texas Instruments. ASML ADRs are up 5% after the company reported orders well beyond investor expectations, showing a surge in AI computing workloads has flowed through to higher demand for its chipmaking tools. Seagate (STX) is up 8% after the computer hardware and storage company’s second-quarter results beat expectations and it gave a positive outlook. Analysts note that results were boosted by strong gross and operating margins. Texas Instruments (TXN) gains 7% after the chipmaker gave an outlook that is seen as positive, signaling improved demand. Analysts highlight strength in the industrial and data center end markets. Magnificent Seven stocks are mostly higher (Nvidia +1.9%, Alphabet +0.4%, Amazon +0.3%, Meta -0.2%, Tesla +0.2%, Microsoft +0.2%, Apple -0.1%

AT&T Inc. (T) rises 3% after reporting fourth-quarter profit and revenue that beat analysts’ estimates, buoyed by what it described as the best broadband subscriber growth in a decade.
Brinker (EAT) rises 5% after the parent of Chili’s and Maggiano’s restaurants reported second-quarter results that topped Street expectations. The beat was led by its Chili’s chain and the company also boosted its annual forecasts.
C3.ai (AI) gains 15% after The Information reported that the AI company is in talks to merge with Automation Anywhere.
Corning (GLW) falls 3% after the communications equipment company reported its fourth-quarter results and gave an outlook.
Elevance Health (ELV) drops 6% after the health insurer gave an adjusted profit forecast for 2026 that fell short of Wall Street’s expectations.
F5 Inc. (FFIV) jumps 8% after the cybersecurity company boosted its revenue forecast for the fiscal year.
New Oriental Education ADRs (EDU) rises 6% after the Chinese education company’s second-quarter results beat Street estimates, and management boosted its annual net revenue forecast.
Qorvo (QRVO) falls 10% after the semiconductor device company gave an outlook that was much weaker than expected.
StandardAero (SARO) falls 5% as leading holders Carlyle and GIC offer 50 million shares in the aviation maintenance company.

In company news, Amazon is cutting about 16,000 roles across the company as part of ongoing organizational restructuring efforts, according to a statement.

Tech stocks are rallying around the world after blockbuster earnings from ASML and SK Hynix added fresh fuel to the artificial-intelligence trade while Microsoft, Meta and Tesla are due to report later (our preview here).  Nasdaq 100 futures climbed 0.8%, putting the index within touching distance of its October record.

ASML rose more than 5% in Amsterdam on fourth-quarter bookings that far exceeded estimates. Asian equities got a boost as SoftBank Group Corp. flagged talks to invest $30 billion in OpenAI. Relentless demand for AI memory fueled a large earnings beat for SK Hynix. LVMH’s sluggish sales weighed on luxury names in Europe.

“The tech sector is likely to lift markets further, so the rally isn’t over yet,” said Claudia Panseri, chief investment officer for France at UBS Wealth Management. “The Fed this evening will be an important clarification for investors, who are at the moment expecting two cuts this year.”

Today’s tech gains might put a pause on the rotation away from the sector. Amid the S&P’s advance to a record, a version of the index stripped of market-cap bias has outperformed, with materials, health care and consumer sectors supplanting tech at the forefront.

The upbeat mood in equity markets comes ahead of the Federal Reserve’s latest policy decision, with investors expecting interest rates to remain on hold. With announcement of a nominee to succeed Fed Chair Jerome Powell in May pending and Governor Christopher Waller among the contenders, a focal point of the rate decision will be whether he dissents in favor of a rate cut US President is seeking; dissents by Governors Stephen Miran and Michelle Bowman are also expected (full preview here). 

With BlackRock executive Rick Rieder seen as the front-runner to become the next Fed chair, bond futures traders are increasing bets that he would favor a more accommodative US monetary policy. Rieder, the firm’s chief investment officer for global fixed income, argued in September for a larger half-point rate cut, rather than the quarter-point moves preferred by the Fed.

“The appointment of Rieder should be a market positive given his background,” wrote Mohit Kumar, chief strategist for Europe at Jefferies. “He is likely to be modestly more dovish than some of the other choices, though it is unlikely that he would rubber stamp Trump’s views.”

The dollar is rebounding against all major currencies following Tuesday’s sharp selloff, which extended as President Trump indicated he’s comfortable with the greenback’s recent decline.Donald Trump’s relaxed stance on the dollar is adding to speculation that the US currency may be entering a more prolonged period of weakness. Speaking to reporters in Iowa on Tuesday, Trump said the dollar’s slide was beneficial for US businesses, moving currency markets by appearing to endorse the greenback’s sharp decline.

“I don’t think it’s going to be that same kind of blanket dollar weakness that we saw last year, but I think there are certainly some pairs where that move does look quite appealing,” Lauren van Biljon, senior portfolio manager at Allspring Global Investments, told Bloomberg TV.

Also due Wednesday are earnings from three of the Magnificent Seven heavyweights, Microsoft Corp., Tesla Inc. and Meta Platforms report after the close (our preview can be found here). Other companies reporting include Starbucks, Danaher, General Dynamics, GE Vernova and AT&T all out before the market open. IBM completes the notable companies to report after the close.

“So far, we’ve been pleasantly surprised by the earnings season in tech, with TSMC and ASML today,” said Karen Kharmandarian, chief investment officer of thematic equities at Mirova in Paris. “We’re still expecting capex to continue to grow substantially among the hyperscalers such as Google, Meta or Amazon, given the momentum in the AI space.”

In Europe, the Stoxx 600 is down by 0.5% as blowout results from Dutch semiconductor equipment maker ASML are more than offset by declines for health care companies and for the luxury goods sector, the latter on disappointing numbers from LVMH. Here are the biggest movers Wednesday:

ASML rises as much as 7.5% to a record high in Amsterdam after reporting orders well beyond investor expectations, showing a surge in AI computing workloads has flowed through to higher demand for its chipmaking tools
Nordnet gains as much as 6.1%, the most since April, after the Swedish retail trading platform and bank reported its latest earnings, which analysts described as a strong finish to 2025. Net commission income was a key driver of revenue
Volvo shares rise as much as 3.2% after the Swedish firm said truck demand was improving in some markets and reported what analysts called a strong margin beat
PSP Swiss Property shares gain as much as 3%, hitting their highest level in almost six years, after being upgraded by analysts at UBS, who argue the underperformance versus peers leaves it positioned as a “quality laggard”
Paypoint shares gain as much as 14% after the payments company reported third-quarter results, with analysts at Panmure Liberum noting it remains on track to meet annual expectations despite a challenging environment
Boohoo shares climb as much as 12% to a six-week high. The online fashion retailer said it expects FY26 adjusted EBITDA to be above previous guidance, citing improved momentum in its youth brands, including PLT, which it also decided not to sell
Howden Joinery climbs as much as 2.3% after Deutsche Bank reiterated its buy rating on the kitchen seller, pointing to both near-term resilience and a substantial long-term growth trajectory
LVMH shares fall 8.2%, the most since April, after the luxury group reported a wider-than-expected drop in fashion and leather goods organic sales for the fourth quarter. Analysts noted management’s limited forward guidance and comments on the uncertain short-term outlook
Tele2 falls as much as 6.7%, the most since October, after the Swedish telecommunications firm reported its latest earnings. Analysts say the print shows strength, but EBITDAaL is on the weaker side and is likely to trigger some cuts to 2026 consensus estimates
JSW shares fall as much as 5.9% in early trading in Warsaw after labor unions hardened their negotiating position, causing the suspension of talks over a rescue plan for the troubled coking coal producer
Marston’s shares drop as much as 16%, the most since September 2020, to wipe out most of this month’s sharp gain after the pub operator reported muted sales

Earlier in the session, Asian equities are set for another record high, supported by a continued rally in technology shares. The MSCI Asia Pacific Index gained as much as 1.2%, with TSMC, SK Hynix and Tencent the biggest boosts to the gauge. Hong Kong led gains in the region amid inflows spurred by dollar weakness. Shares also rose in South Korea, helping the country’s market cap to overtake that of Germany. Meanwhile, Indonesian stocks tumbled after MSCI raised concerns about their investability and warned of a potential downgrade to frontier-market status.

“The shortage in supply in memory chips will continue to be a key catalyst for Asian memory makers,” said Ken Wong, an Asian equity portfolio specialist at Eastspring Investments Hong Kong. “We probably won’t see equilibrium on supply versus demand till early next year.”

In FX, the greenback is rebounding after hitting 2022 lows. The Bloomberg Dollar Spot Index up by 0.3%, though mixed against G-10 peers.

In rates, treasuries were little changed ahead of the Fed rate decision with marginal long-end underperformance extending Tuesday’s late steepening move as the US dollar weakened further. US session features Federal Reserve rate decision, with swaps market priced for no change in the 3.5%-3.75% target range for federal funds. US front-end to belly yields are slightly richer on the day with longer maturities little changed, steepening 5s30s curve by about 1bp to 104bp, highest this week; 10-year, little changed near 4.24%, slightly lags bunds and gilts in the sector. Short-end bonds in Europe rallying as traders add to ECB rate cut bets.

In commodities, the blistering rally in precious metals continued as gold briefly topped $5,300 an ounce. Silver rose as much as 3.6% before pairing the advance.  Oil prices are choppy, Brent now falling and hovering a little above $67/barrel.

Today’s US economic calendar is blank; FOMC announcement is at 2pm New York time, followed by Chair Powell’s press conference at 2:30pm. Mag 7 earnings begin today with Microsoft, Meta and Tesla reporting after the close. 

Market Snapshot

S&P 500 mini +0.3%
Nasdaq 100 mini +0.8%
Russell 2000 mini +0.5%
Stoxx Europe 600 -0.4%
DAX -0.2%
CAC 40 -1%
10-year Treasury yield little changed at 4.25%
VIX -0.1 points at 16.25
Bloomberg Dollar Index +0.3% at 1178.01
euro -0.6% at $1.1973
WTI crude -0.2% at $62.24/barrel

Top Overnight News

President Trump has said for months that he’s made up his mind about who should lead the Federal Reserve. But with each passing week without an announcement, some people close to the process aren’t sure any of his four finalists fully meet his requirements, a new chair who will pursue his demands for lower interest rates while still commanding enough credibility on Wall Street and from his colleagues to deliver them. WSJ
Bond traders are betting on a dovish Fed shift as BlackRock’s Rick Rieder gains momentum to succeed Powell. His advocacy for more aggressive cuts have sparked increased trading activity in futures and options markets. BBG
China has given the green light to three of its largest tech companies (ByteDance, Alibaba, Tencent) to buy Nvidia’s H200 artificial intelligence chips, four people familiar with the matter told Reuters, marking a shift in position as Beijing seeks to balance its AI needs against spurring domestic development. RTRS
Some Bank of Japan board members expressed rising concern over the extent to which the yen’s depreciation is affecting price trends when they discussed policy in December before deciding at that meeting to raise the benchmark interest rate to the highest since 1995. BBG
President Donald Trump said on Tuesday the United States and South Korea would work out a solution, in response to a query about his surprise threat a day earlier to step up tariffs to 25% on imports from the Asian ally. RTRS
Saudi Arabia on Tuesday ruled out the use of its airspace and territory for a potential U.S. attack on Iran, complicating the Trump administration’s options in response to Tehran’s violent crackdown against Iranian protesters. WSJ
Australia’s consumer price growth remained elevated in the final quarter of 2025, strongly signaling that the central bank will raise interest rates next week, or run the risk that inflation will get too hot. WSJ
ECB’s Kocher says the central bank may need to cut rates if the strong euro started impacting inflation forecasts. FT
Nasdaq futures got a boost as ASML’s orders smashed estimates on investments in AI infrastructure (ASML +6% premkt after reporting very strong 4Q25 orders for third quarter in a row with guide for 2026 above cons). The dollar steadied even after Donald Trump’s comments embracing a weaker greenback. Gold hit a new record. BBG
Amazon is cutting about 16,000 roles to simplify its structure amid rising competition over AI. ASML also announced reductions amounting to about 4% of its staff. BBG

Trade/Tariffs

China has resumed the purchase of Canadian canola, Bloomberg reported citing sources; crushers in China have booked cargoes for loading in the next few months.
South Korea’s Presidential Adviser said they cannot rule out the possibility of the US mentioning a tariff hike again because of future disagreement over investment.
EU and Vietnam in a joint statement are set to agree on a deeper connection on critical minerals and semiconductors.
US President Trump said we will find a solution together with South Korea when asked about his announcement of raising tariffs against Korea.
US President Trump said we’re making a lot of good deals, Fox News interview.
USTR’s Greer said Chinese EVs won’t enter the US from Canada without heavy levies, Fox Business reported; criticizes South Korean digital services legislation. The US is still imposing a 50% tariff rate on Indian goods. India has made a lot of progress weaning off Russian oil.

Central Banks

US President Trump affirms that he will announce Fed chair pick soon.
Minutes from BoJ’s December 18th-19th meeting noted that members said it is appropriate to keep raising rates if the outlook is met, while a member said waiting another meeting in raising rates would be risky given impacts of FX on inflation. Most members said BoJ should not have a preset idea on rate hike pace and must scrutinise the economy, prices and markets in making decisions at each meeting. A few members said adjusting degree of monetary support will help stabilise markets and have merits to the economy. A member warned that divergence of real rates from equilibrium may impair long-term economic growth.
ECB’s Villeroy said the ECB are closely monitoring the euro and its effect on inflation, adds there is no target for the euro exchange rate.
ECB’s Cipollone said uncertainty may increase, hitting a recovery, and warned that global turbulence could hit the euro area, according to Bloomberg.
ECB’s Kocher said the central bank would need to act if the euro keeps gaining, according to FT.
ANZ now sees the RBA raising rates by 25bps at its meeting next week, while it views this as a single insurance tightening and not the start of a series of hikes.
New Zealand Finance Minister Willis said the RBNZ said we’ll be easing off the accelerator at some point and will be guided by data.
Thailand Central Bank Governor Vitai said the economy may grow 1.5%-1.7% in 2026, adds need to tackle structural issues, and that Thailand is facing US tariffs and structural problems.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed with an early positive bias seen following the mostly constructive handover from Wall Street, although some cautiousness began to seep through ahead of looming key risk events. ASX 200 was subdued with the index dragged lower by weakness in tech and consumer stocks, while the predominantly firmer-than-expected inflation data from Australia supports the case for a hike at next week’s RBA meeting. Nikkei 225 underperformed from the open, following the recent currency strength spurred by intervention speculation and US President Trump’s FX-related rhetoric. Hang Seng and Shanghai Comp were in the green with energy and telecom stocks among the index leaders in Hong Kong, while the mainland was kept afloat after developer China Vanke won creditor approval to extend another two CNY bonds and with a report noting that China approved the first batch of NVIDIA’s H200 AI chips for import involving several hundred thousand H200 AI chips.

Top Asian News

China is reportedly expected to move to more targeted measures across different sectors to reduce excessive competition and result in quality developments, Securities Times reported citing sources.

European bourses (STOXX 600 -0.4%) are generally trading with modest losses, aside from the AEX, which has been boosted by post-earnings strength in heavyweight ASML (+4.8%). The company beat across its headline metrics, provided a rosy outlook, and announced a EUR 12bln share buyback. European sectors hold a negative bias. Tech leads (boosted by ASML), whilst Consumer Products has been pressured by losses in LVMH (-7.1%) after its results disappointed.

Top European News

UK PM Starmer delays decision on Chinese-built wind farm factory after security fears, according to The Times.
Leaders of Dutch political parties reach an agreement on forming minority government.
Maersk (MAERSKB DC) announces a stoppage in operations in the West Mediterranean terminals, adding that there’s no clear sign on when operations are to resume.

FX

DXY is attempting to claw back some of yesterday’s lost ground, after the index dropped from a high of 97.286 to a low of 95.551 amid the ongoing de-dollarisation theme. The data docket is quiet, so focus will be on the FOMC, which is expected to hold rates at 3.50–3.75%. Markets are focused less on the decision itself and more on any hints around how long the Fed remains patient before cutting, with around 45bps of easing priced by year-end.
USD/JPY is consolidating after its recent slide below the 100 DMA (153.65) yesterday, which saw the pair trade within a 152.09–154.87 range. The pair currently trades around the mid-point of the 152.14–153.06 band at the time of writing.
EUR/USD reached a high of 1.2082 on Tuesday (vs. a low of 1.1851), levels last seen around mid-2021, supported by broader USD weakness. The pair’s strength comes ahead of next week’s ECB meeting, where commentary will be watched for signs of concern that the ECB may miss its inflation target to the downside. The pair currently trades below 1.2000 within a 1.1970–1.2045 intraday range.
Antipodeans are among the better performers. AUD/USD briefly rose following Australian CPI data, where the monthly December reading printed firmer than expected, while the headline quarterly figures matched estimates. However, the RBA-preferred trimmed mean inflation measure exceeded forecasts and remained above the RBA’s 2–3% inflation target. The data prompted banks such as ANZ, Westpac, CBA, and NAB to back a February rate hike from the RBA, with markets pricing a 70%+ probability of this outcome.
South Korea’s Presidential Adviser said that US Treasury Secretary Bessent’s earlier comment on KRW reflects views that Korea’s investment might become difficult if it raises anxiety in the FX market. Hopes that Korea’s US investment bill will be passed in February and will communicate with the US to prevent tariffs from being raised. Alaska LNG project has not been discussed between both countries and will be reviewed under principle of commercial feasibility after investment fund is launched.

Fixed Income

JGBs were bid overnight. Initial gains were exacerbated by a strong 40yr auction, which helped lift the benchmark to a 131.77 peak, with gains of just under 50 ticks at best. Aside from this, focus was on comments from Trump suggesting that Japan and China are always looking to devalue their currencies—remarks which may have weighed on Japanese yields from the start of trade.
USTs trod water overnight in the typical pre-FOMC holding pattern. Since then, a bout of pressure has emerged, with USTs sliding to a 111-21 base, down just over 4 ticks at worst. For the Fed, the full Newsquawk preview is available: rates are expected to remain unchanged in the 3.50–3.75% range, with focus on the number of dissents, any changes to statement language around the labour market, and/or additional adjustments.
Bunds have been grinding higher through the morning, reaching a 128.12 peak as, despite strong ASML earnings, European sentiment remains on the back foot. There has been no move from ECB speakers thus far, who have stuck to the script. A robust 2036 Bund auction (b/c 1.65x vs prev. 1.29x) had little impact on the benchmark.
Gilts opened around 10 ticks higher, reaching a 91.11 peak, before fading back to the figure, where they currently reside. As such, the benchmark is broadly flat on the day, with UK-specific drivers light and the bias likely to remain contained into the Fed.
Japan sold JPY 400bln in 40-year JGBs; b/c 2.76x (prev. 2.59x), highest accepted yield 3.720% (prev. 3.555%). Price at the highest accepted yield 87.27 (prev. 90.40).
Germany sells EUR 4.604bln vs exp. EUR 6bln 2.90% 2036 Bund: b/c 1.65x (prev. 1.29x), average yield 2.85% (prev. 2.83%), retention 23.3% (prev. 24.3%)

Commodities

Crude benchmarks initially gained at the start of the Asia-Pac session, following on from Tuesday’s bid, before paring back those gains. As of writing, WTI and Brent are trading near session lows of USD 62.08/bbl and USD 66.14/bbl, respectively, after peaking earlier in the session at USD 63.00/bbl and USD 67.13/bbl. News flow has been light so far, as markets continue to absorb the effects of the Arctic storm.
With gas output slowly returning as the worst of the Arctic storm passes, natural gas futures continue to pare back gains made in recent sessions. Henry Hub futures have fallen back below USD 4.00/MMBtu, currently trading around USD 3.63/MMBtu, while Dutch TTF remains below EUR 38/MWh.
Precious metals continue to trade at record levels, with spot gold extending to another ATH at USD 5,311/oz, supported by the weaker dollar in Tuesday’s session following Trump’s comments indicating comfort with the recent decline in the greenback. Spot silver remains near record highs at USD 113.80/oz, as the London liquidity squeeze persists.
3M LME copper gained throughout the APAC session, aided by a weaker dollar and outperformance in Chinese equities. The red metal reclaimed the USD 13,000/t handle, peaking at USD 13.25k/t, before oscillating within a roughly USD 100/t range as the European session gets underway.
Vitol Asia forecasts H1 2026 crude build of 700k BPD.
China’s Shanghai Futures Exchange to adjust price limits and margin requirement for some gold and silver futures contracts from the 30th January closing settlement.
Standard Chartered forecasts copper prices in H1’26 at USD 12.96k compared with USD 11.47k in H2’26; USD softness and sharp moves in gold and silver has supported copper.
Kazakhstan’s Energy Minister said oil output decline will ensure the country remains within OPEC+ quotas, adds Kazakhstan’s energy minister said, oil production in Kazakhstan declined around 900,000 tons after halts at Tengiz and Korolev.
ExxonMobil (XOM) executive said LNG demand will remain strong for the next 10 years and LNG demand forecast to double between now and 2050.
Thailand Central Bank Governor said cap in gold trading will take effect in March.
US Weekly Private Inventory Data (bbls): Crude -0.2mln (exp. +1.8mln), Distillate +2.0mln (exp. -0.6mln), Gasoline-0.4mln (exp. +1.0mln), Cushing -0.0mln.

Geopolitics: Ukraine

Russia’s Kremlin Spokesperson Peskov said work on Ukraine peace talks is underway, however they are very complicated negotiations.
“Russia and India to conduct naval exercises in the Indian Ocean in February”, Al Arabiya reported citing Tass.
USTR’s Greer said Chinese EVs won’t enter the US from Canada without heavy levies, Fox Business reported; criticizes South Korean digital services legislation. The US is still imposing a 50% tariff rate on Indian goods. India has made a lot of progress weaning off Russian oil.

Geopolitics: Middle East

Iran’s Foreign Minister said he hasn’t been in contact with US Envoy Witkoff recently, adding that there hasn’t been any negotiation requests.
Military source in the Houthi ranks in Yemen told the Lebanese newspaper that the Houthis will not allow any ship or American aircraft carrier to approach the Red Sea or the Arabian Sea due to the threat to Yemen, via X.
The Rafah crossing will open next Sunday in both directions, according to the Israeli Walla website.

Geopolitics: Other

EU’s Defence Commissioner said Europe must quickly build their defence independently.
“Russia and India to conduct naval exercises in the Indian Ocean in February”, Al Arabiya reported citing Tass.
South Korea and Japan will conduct defence ministerial talks in Yokusuka this week, according to Yonhap.
North Korea said it had tested a large calibre multiple rocket launch system, according to KCNA.

US Event Calendar

7:00 am: Jan 23 MBA Mortgage Applications, prior 14.1%
2:00 pm: Jan 28 FOMC Rate Decision (Upper Bound), est. 3.75%, prior 3.75%
2:00 pm: Jan 28 FOMC Rate Decision (Lower Bound), est. 3.5%, prior 3.5%

DB’s Jim Reid concludes the overnight wrap

Risk assets put in another decent performance yesterday, with solid earnings pushing the S&P 500 (+0.41%) to another record, and futures on the index (+0.29%) are pointing to more gains this morning. But even as US equities reached new heights, the dollar index (-0.85%) fell to its weakest in nearly four years, having now posted its biggest 4-day decline since the Liberation Day turmoil last April. So it was a pretty mixed day for US assets. Meanwhile, geopolitical risk continued to dominate the headlines, with Brent crude oil reaching its highest since September after Trump said the US had a “big armada” heading to the Middle East, which together with the dollar slump pushed gold prices (+3.42%) to another record close of $5,180/oz. And there’ll be no let-up in the headlines today, as we’ve got the Fed’s latest decision tonight, along with earnings from three of the Mag 7 after the US close.

Ahead of the Fed’s decision, the main story was that ongoing dollar weakness, which saw the Dollar index (-0.85%) close at its lowest level since February 2022. Several factors contributed, but importantly, Trump himself was asked about his thoughts on the decline, and said “No, I think it’s great”, suggesting he wanted the currency to “just seek its own level, which is the fair thing to do”. That followed weak US data earlier in the session, as the Conference Board’s latest consumer confidence print hit its lowest since 2014, at 84.5 (vs. 91.0 expected). And on top of that, fears around a government shutdown this week continued to swirl, with Polymarket giving it a 76% chance of happening this Saturday. So all those factors contributed to pre-existing concerns pushing the dollar lower, including questions around the Fed’s independence, tariff policy uncertainty and the fiscal trajectory.

Of course, with the dollar moving lower, that meant several other currencies reached multi-year highs against it, with the Euro closing above $1.20 yesterday for the first time since June 2021. But that’s also raised questions about whether the ECB would need to think about another interest rate cut given the downward pressure that would cause on inflation. Indeed, Austrian central bank governor Kocher said in an FT interview out this morning that continued euro appreciation could mean the ECB has to react. So the euro’s slipped back a bit this morning after those comments, and is currently trading at $1.1987.

As all that was happening, investor concern continued to mount about geopolitical risk, with ongoing speculation about a potential US strike on Iran. That followed comments from Trump, in an interview recorded on Monday, saying that the US had a “big armada” heading to the Middle East, although he said “I’d rather not see anything happen”. So that helped push up oil prices, with Brent crude (+3.02%) reaching its highest level since September, at $67.57/bbl, whilst WTI (+2.90%) reached its highest since October, at $62.39/bbl. And there was plenty happening elsewhere for commodities, as precious metals saw another round of records yesterday thanks to heightened geopolitical risk and a broader move away from the US Dollar. So gold prices (+3.42%) posted their best day since April to a new record of $5,180/oz, whilst silver (+8.00%) also hit a record of $112.08/oz. Moreover, those gains have continued overnight, with gold up another +1.55% to $5,261/oz, whilst silver has risen +3.19% to $115.66/oz.

Looking forward, the main highlight on today’s calendar is the Federal Reserve’s policy decision, where it’s widely expected they’ll keep rates on hold after 3 consecutive rate cuts. So with the decision unlikely to surprise, the focus will be on the press conference, where several non-economic issues are likely to come up, including the recent DoJ subpoena, the Lisa Cook case at the Supreme Court, the next Chair, and whether Powell will remain as a Governor after his term as chair concludes in May. Our US economists have more in their preview (link here), but they expect Powell to reiterate the points made in his statement on the subpoena earlier this month, and not comment on the next Chair. Then in terms of policy, they expect the Fed to present a more upbeat view about the economy, and think the statement will signal that they’re well-positioned to respond to risks on either side of their dual mandate.

As we head into the Fed’s decision, that pressure on the dollar also spread to long-end Treasuries yesterday, with 10yr yields (+3.2bps) moving a couple of basis points higher after Trump’s comments to end the day at 4.24%, while 30yr yields rose +5.7bps on the day to 4.86%. By contrast, 2yr yields (-1.7bps) rallied after the weaker consumer confidence data, as investors moved to price in more Fed rate cuts this year. So by the close, 47bps of cuts were priced in by the December meeting, up +1.0bps on the day.

Despite that backdrop of dollar weakness and heightened geopolitical tensions, it was actually a very strong day for US equities, with the S&P 500 (+0.41%) posting a 5th consecutive advance that took the index to a new record. Tech stocks led the way, with the Magnificent 7 (+0.89%) closing just over 1% beneath its own record from late-October, ahead of earnings from Meta, Microsoft and Tesla after tonight’s close. Nevertheless, the gains were fairly narrow, with more than half of the S&P 500 constituents lower on the day.

Meanwhile in Europe, equities also put in a strong performance, with the STOXX 600 (+0.58%) closing just 0.2% beneath its own record high from a couple of weeks ago, whilst Spain’s IBEX 35 (+0.70%) hit a new record of its own. However, European bonds only saw modest moves, with yields on 10yr bunds (+0.8bps), OATs (+0.1bps) and BTPs (+0.3bps) all posting small increases. Gilts were the main exception to that, with the 10yr yield (+2.8bps) rising to 4.52%.

Overnight in Asia, there’s been a fairly mixed performance. Some indices have put in a very strong performance, with the KOSPI (+1.64%) currently on track for another record high, whilst the Hang Seng (+2.31%) is currently on course for its highest closing level since 2021. Moreover, the CSI 300 (+0.35%) and the Shanghai Comp (+0.36%) are also higher. However, Japan’s Nikkei (-0.46%) and the TOPIX (-0.85%) have lost ground, which comes as the yen continued to strengthen yesterday, closing at 152.21 per US dollar, its strongest since late October. But JGBs have put in a decent performance overnight  after a 40yr auction saw strong demand. So the 10yr JGB yield is down -4.7bps this morning to 2.23%.

Looking at the day ahead, and the main highlight will be the Federal Reserve’s policy decision, along with Chair Powell’s press conference. Otherwise, the Bank of Canada will announce their latest decision, and we’ll hear from the ECB’s Elderson and Schnabel. Finally, today’s earnings releases include Meta, Microsoft, Tesla, IBM, AT&T and Starbucks.

Deutsche Bank shares are down over 3% in early trading following reports that German police raided their offices in Frankfurt and in Berlin on Wednesday morning, as part of an investigation into money laundering.

“We confirm that the Frankfurt public prosecutor’s office is on site in our offices,” a Deutsche Bank spokesperson said in an emailed statement.

“The bank is cooperating fully with the public prosecutor’s office. We cannot comment further.”

As Bloomberg reports, the raid is a setback for Deutsche Bank Chief Executive Officer Christian Sewing who is widely credited with turning around the lender and drawing a line under a long period of scandals and losses after taking over almost eight years ago.

The bank has repeatedly been raided in the past.

In 2022, German law enforcement searched Deutsche Bank’s Frankfurt offices as part of an earlier money laundering probe.

In May that year, the German bank and its DWS subsidiary were investigated regarding allegations of greenwashing at the latter.

In 2018, Deutsche Bank was inspected by 170 law enforcement officials as part of a tax evasion probe into two employees.

The investigation — which stemmed from the 2016 so-called “Panama papers” leak — was later dropped, with the lender fined over compliance shortcomings.

Deutsche Bank “has maintained business relationships in the past with foreign companies which, in turn, are suspected of having been used for money laundering purposes as part of further investigations,” the prosecutor’s office said in the statement.

It’s conducting a raid at Deutsche Bank premises in Frankfurt and Berlin to investigate the matter, it said.

The investigation comes a day before the German lender is due to publish its fourth quarter and year-end earnings report.

Shares in ASML, Europe’s most valuable company which builds the ‘printing presses’ for modern microchips, exploded higher in Wednesday trade after Q4 orders blew past analyst estimates. The Dutch semiconductor company also announced job cuts to boost efficiency, and a share buyback of up to €12B by the end of 2028. 

Fueled by demand for AI chips, bookings in the fourth quarter hit a record €13.2 billion ($15.8 billion), the Veldhoven, Netherlands-based company said in a Wednesday announcement reported by Bloomberg. Analysts estimated an average of €6.85 billion, according to the report. Sales were €9.72bln (exp. €6.95bln). 

“In the last months, many of our customers have shared a notably more positive assessment of the medium-term market situation, primarily based on more robust expectations of the sustainability of AI-related demand. This is reflected in a marked step-up in their medium-term capacity plans and in our record order intake,” the company said. 

The company will cut around 1,700 jobs (around 4% of its workforce) – mostly in the Netherlands and some in the US, with the goal of streamlining the organization.  

“The last three months have brought a lot of clarity” about what AI means for the semiconductor industry, CEO Christophe Fouquet told Bloomberg TV. “Our customers start to believe that this AI demand is sustainable, and therefore they are moving to building capacity, and they are moving very aggressively.”

Shares in the company were up 6% to €1,291.20 in Amsterdam, pushing the stock beyond to YTD gains of 40%. Japanese suppliers also felt the love, with Lasertec Corp., Tokyo Electron Ltd. and Screen Holdings Co., benefiting from the success. 

ASML makes lithography machines – tools used to etch microscopic circuit patterns onto silicon wafers during chip manufacturing. Without them, companies like TSMC, Intel, and Samsung couldn’t make the most advanced chips used in AI accelerators, smartphones, GPUs, and defense systems. 

Their crown jewel is Extreme Ultraviolet (EUV) lithography, which uses a 13.5nm wavelength light that allows them to print features only a few atoms wide, and enables the most advanced process nodes (7nm, 5nm, 3nm and beyond). 

EUV machines require plasma-generated EUV light (created by blasting molten tin with lasers), mirrors polished to near-perfect atomic smoothness, vacuum systems (EUV is absorbed by air), and nanometer-precision alignment across thousands of components. 

Each machine costs $150 – $200 million and weighs 180 tons. 

As companies began pouring hundreds of billions of dollars into data centers, chipmakers have been driven to increase capacity – stoking demand for ASML’s products. 

Over half of last quarter’s bookings were for EUV machines, totaling €7.4 billion, according to the company. 

In 2025, net sales were €32.7 billion, while revenue is seen at between €34 billion and €39 billion, blowing past previous guidance.

“ASML has knocked it out of the park when it comes to order numbers,” Ben Barringer, head of technology research at Quilter Cheviot, told Bloomberg. “Given the strength of the order book, we fully expect it to raise guidance throughout the year.”

China was ASML’s largest market in the fourth quarter – accounting for 36% of net system sales. That said, the Chinese market is expected to drop to around 20% of revs going forward, CFO Roger Dassen said in a call with reporters. 

That said, China is restricted from buying the company’s most advanced EUV machines, so ASML is selling them older-generation DUV (deep ultraviolet) systems that are roughly 8 generations behind the cutting edge, and are suitable for mature-node chips, not bleeding-edge AI chips (think cars, appliances, industrial equipment, etc.). 

Authored by Jack Phillips via The Epoch Times (emphasis ours),

President Donald Trump on Tuesday rebuffed calls for Homeland Security Secretary Kristi Noem to step down from her position in the midst of criticism of immigration officials in the wake of a protester-involved shooting in Minneapolis over the past weekend.

President Donald Trump departs for Florida from the White House on Jan. 16, 2026. Madalina Kilroy/The Epoch Times

Some Democratic lawmakers called for Noem’s ouster after an agent shot and killed a protester, Alex Pretti, during an altercation in Minneapolis on Saturday. Noem had described Pretti as someone engaging in domestic terrorism, although a top Justice Department official said that administration officials don’t believe Pretti’s actions reach the legal standard for terrorism.

Trump was asked about Noem’s job status while he was speaking with reporters outside the White House on Tuesday. He told reporters he believes Noem is doing a “very good job” and a “great job” as the head of the sprawling federal department, and he cited her work in shutting down the United States–Mexico border.

“Is Kristi Noem going to step down?” a reporter asked him. Trump directly responded by saying no.

Speaking about the border, Trump said that people “forget” that the prior administration had allowed “millions of people” to come through. Border authorities now allow “no one” to come through, and people are only coming into the United States legally, he said.

The Biden administration and the Democratic Party willfully “had allowed tens of millions of people” to enter the United States, with many being murderers, drug dealers, addicts, and people who were removed from mental institutions, Trump said.

On Monday, Trump said that private conversations with both Minnesota Gov. Tim Walz and Minneapolis Mayor Jacob Frey were productive, while the two Democratic leaders offered similarly positive comments.

Walz’s office said Trump had agreed to direct the Department of Homeland Security (DHS) to ensure state authorities could conduct their own investigation into the Pretti shooting, while Frey said in a post on X that his understanding was that some federal agents would begin leaving the city on Tuesday.

Senate Minority Leader Chuck Schumer (D-N.Y.) said his party would vote against funding legislation that includes money for DHS, which oversees Immigration and Customs Enforcement (ICE), the federal immigration agency. Congress faces a Jan. 30 deadline to fund the government or risk a partial government shutdown.

Schumer, in a Sunday statement, said Republicans should “join Democrats in overhauling” both ICE and U.S. Customs and Border Protection.

“Senate Democrats will not allow the current DHS funding bill to move forward,” he also said.

Democratic lawmakers in the House have called for Noem’s removal after the Pretti shooting, with several issuing a joint statement on Monday calling for immigration agents in Minneapolis to be stood down.

“This tragic killing comes on the heels of the fatal shooting of Renee Good earlier this month, and multiple other documented incidents of civil-rights abuses and excessive enforcement by ICE and CBP in Minnesota—demonstrating a pattern of misconduct that has fractured trust and terrified communities,” they said in the statement.

The Trump administration has vowed to carry out mass deportations of illegal immigrants and has said that many of the people being arrested and removed from the country are criminals with lengthy rap sheets, including convictions for child abuse, sexual assault, and other crimes.

Reuters contributed to this report.

Authored by Jonathan Turley,

Some of us in the free speech community have been writing about the hypocrisy of many in the media and academia suddenly championing free speech values after years of silence (or support) over censorship of conservatives, libertarians, and contrarians.

A good example can be found in the Chicago area, where a physical education teacher is on administrative leave and faces possible termination after posting two words (“Go ICE”) on Facebook in support of Immigration and Customs Enforcement (ICE).

Local leaders and groups are demanding that he be fired, even though a posting opposing ICE would likely have been heralded rather than condemned.

Social media exploded with commentators calling the teacher a “f****** piece of s***.”

A flyer demanded termination because any expression of support for ICE is “inappropriate and unsuitable for an educator.”

The flyer insisted that “keeping this teacher will disrupt the emotional welfare and therefore, the education of our students.”

Local Democratic leaders immediately joined the mob. That includes Karina Villa, who posted a message saying she stands in “unwavering solidarity” with those demanding action given the “disturbing comments reportedly made by an educator.”

As is often the case, Villa did the perfunctory nod toward the right to free speech before joining the effort to gut it. She acknowledged the right, but noted that “as educators we have the responsibility to our students and their families to create a safe and welcoming environment for all.”

According to the district’s superintendent, Kristina Davis, the unnamed teacher submitted a resignation on Friday but then withdrew that resignation before the board could approve it. She then suspended the teacher pending an investigation.

That “investigation” concerns the posting of two words in favor of law enforcement outside the school on a personal social media account.

In the meantime, Mayor Daniel Bovey and the city council of West Chicago held a “listening session” on Monday to address the trauma of having a teacher who openly supports ICE.  The District also addressed what it called the “disruption for students, families, and staff” and assured families that “our schools are safe spaces.”

Once again, the teacher simply wrote “Go Ice” on a personal social media account.

Notably, the nearby Chicago Teachers’ Union is one of the most radical and politically active in the country.

Members have publicly voiced support for the Venezuelan regime and have engaged in violent public declarations against the Administration.