Europe opens higher in holiday-thinned trade

US stock indices were lower across the board by Wednesday’s close as investors absorbed a more hawkish tone in the latest Federal Reserve minutes. The broad-based decline was driven by the Fed’s warning that inflation risks could persist longer than expected, with additional concerns over the economic drag from Trump’s proposed reciprocal tariffs.

However, sentiment shifted sharply after the bell. Nvidia delivered strong earnings, rising 5% in extended trade and offering a welcome boost to the tech sector.

Source: TN Trader

Adding to the optimism, a federal court blocked Trump’s tariff package, instantly lifting US stock index futures by over 1%. This after-hours rally reflected a swift change in sentiment as traders welcomed the prospect of reduced trade headwinds.

Asian Pacific stock indices opened higher and maintained their upside momentum throughout the overnight session. The Japanese Nikkei led regional gains, climbing nearly 2% as traders responded positively to Nvidia’s earnings and the court decision on tariffs.

Source: TN Trader

While broader concerns remain, the shift in tone from the US after-hours session provided a clear risk-on cue for the region’s markets.

In FX markets, the US dollar rallied following the overnight news that Trump’s reciprocal tariffs had been blocked. The greenback caught a bid on the back of improved sentiment and declining safe-haven flows. The Dollar Index gapped higher before pulling back from its best levels.

Source: TN Trader

As a result, currencies like the Japanese yen and Swiss franc - which tend to strengthen in times of uncertainty - fell modestly. The shift reflects improved risk appetite, with traders rotating out of haven assets and back into the dollar.

The gold price dropped sharply overnight, drifting lower throughout Wednesday’s session. It found some support around $3,250, a level that coincides with its 50-day moving average. It recovered off its lows overnight and into today’s European session. However, gold still looked vulnerable, although it may attract some buying interest should the US dollar pull back.

Source: TN Trader

In contrast, silver managed a modest gain, recovering from earlier weakness and showing a bit more resilience.

Source: TN Trader

Crude oil prices advanced strongly on the expectation that the blocked US tariffs would help sustain global demand. Markets also looked ahead to the delayed US inventory report, due later today, which expects a build of around 300,000 barrels.

Source: TN Trader

The combination of sentiment-driven gains and anticipation around supply data helped crude recover ground, with prices moving back toward the upper end of recent ranges.

Natural gas prices held steady this morning after suffering a sharp drop in Wednesday’s session. Despite this, the market remained confined within its recent range, showing little follow-through in either direction.

Cryptocurrency markets rose again, making back a significant proportion of yesterday’s losses. News of the legal block on the Trump administration's reciprocal tariffs helped to improve risk appetite and lift broader market momentum. Bitcoin held its recent gains while Ether outperformed, rallying 3.5% overnight.

The VIX fell 3% to hover just below 20, indicating a significant drop in market volatility. The move mirrored the after-hours recovery in US stock index futures and the easing of trade tensions following the court’s tariff ruling.

Although the VIX price remains elevated historically, the overnight decline signals a shift in tone, with investors breathing easier for now.

The economic calendar is full, with key releases including weekly jobless claims, GDP revisions, housing data, and crude oil inventories. On the earnings front, eyes will be on Best Buy, Dell, and Gap, following Nvidia and Salesforce’s updates. 

These results could help guide the broader market tone, particularly for the Dow, which may be sensitive to the retail and tech names on deck.

China’s Vice President added his voice to the trade dispute, urging the US to end “tariff wrongdoing” - a pointed remark given the overnight court block.

Meanwhile, reports indicate India is poised to rise in global economic rankings, reflecting shifting macroeconomic trends. Separately, JPMorgan expressed a bullish stance on European equities despite ongoing headwinds.

Back in the US, Elon Musk formally stepped away from the Trump administration amid pressure from Tesla shareholders. Meanwhile, political watchers await Trump’s response to the blocked tariff plan, which could reset the narrative once again.

The market narrative flipped quickly overnight. The Fed minutes initially rattled sentiment, but Nvidia’s strong performance and the court’s tariff intervention boosted confidence. Overnight, the dollar was up, cryptos were charging ahead, and equities were stronger across the board - for now.

Still, volatility remains elevated, and investors are watching closely for further political and economic signals. The bulls have reclaimed some ground, but all eyes are now on today’s data, earnings, and the next Trump move.