Asian Pacific stocks mixed

US stock index futures were weaker overnight, contributing further to the tech-led losses made on Thursday. All the majors had been rallying quite confidently since Tuesday afternoon. But they reversed direction soon after NVIDIA released its latest quarterly results after Wednesday’s close. These beat consensus forecasts quite easily, and forward guidance was also more upbeat than anticipated.

But, following an initial spike higher, the stock then sold off, ending yesterday’s session down over 5%. Market participants attributed the selloff to lingering doubts over the sustainability of AI-driven capital expenditure, particularly regarding NVIDIA’s relationship with OpenAI.

Last night, the S&P 500 lost 0.5%, while the NASDAQ dropped 1.2%. The Dow Jones was unchanged, while the Russell 2000 added 0.5%. The S&P’s tech sector fell 1.8% while financials gained 1.3%, evidence that investors were keen to rotate into more cyclical sectors from growth, which is finally being considered as overvalued, given the uncertainty of the return on AI investment.

This was brought into even sharper focus after last night’s close. AI cloud infrastructure provider, CoreWeave, fell as much as 12% after issuing disappointing quarterly revenue guidance. In contrast, Dell Technologies surged 12% in after-hours trading following record quarterly earnings.

Today is the final trading day of February, a month which has now been characterised by volatility in technology shares. The Nasdaq Composite is on pace for a 2.5% monthly decline, its worst performance since last March.

The S&P 500 is tracking a 0.4% loss, while the Dow is set for a 1.2% gain. This divergence provides further evidence of a clear rotation away from high-growth AI-linked names into more traditional cyclical sectors, even as broader macro risks tied to trade policy and geopolitical tensions linger in the background.

Key amongst these are talks between the US and Iran concerning the latter’s nuclear ambitions. The third round took place in Geneva yesterday. While there was no breakthrough, it was agreed that progress had been made with both sides ready to extend negotiations. The US military forces continue to mass in the region.

The S&P 500 has repeatedly run into resistance on all its recent rally attempts. This means that the 7,000 level has not yet been breached significantly, which is a growing frustration for the bulls. But the bears are getting equally frustrated.

Source: TN Trader

All selloff attempts have petered out before the S&P has breached significant support levels. Until there’s a break under last week’s low of 6,775, which then leads to a protracted break below 6,730, there’s still a good chance that the index can make higher highs over the next few months.

Traders will be keeping a close eye on today’s wholesale inflation number, following a spate of hawkish comments from various Fed members.

European and UK markets were mixed in early trade. The UK’s FTSE 100 was the undoubted star of the show as it pushed to yet another all-time intra-day high, helped along by mining stocks. Meanwhile, the Euro Stoxx 50 and French CAC drifted back from their respective record highs hit yesterday. The German DAX was a tad firmer and remains within sight of its own all-time high from back in January.

Source: TN Trader

There was a UK parliamentary by-election in the Gorton and Denton constituency of Greater Manchester. The Green Party overturned a large Labour majority in what had previously been a safe and solid Labour seat. Reform finished second, pushing Labour into third place, another big setback for Prime Minister Keir Starmer. Both the Tories and Lib Dems lost their deposits, as did the Monster Raving Loony Party.

It was another relatively quiet session across FX this morning. Yesterday, the cash Dollar Index once again ran into mild, but persistent, resistance around 97.70. This has seen it pare back recent gains as traders await the January US Producer Price Index update later today.

Source: TN Trader

The headline PPI reading is expected to come in at 0.3% month-on-month, down from 0.5% in December. There are growing concerns about US inflation, which looks as if it may start to pick up again. Last week’s Core PCE came in at 3.0% year-on-year, hotter than expected, moving in the wrong direction, and still well above the Fed’s 2% target.

The CME’s FedWatch Tool still forecasts 50-basis points (bps) worth of rate cuts this year. But investors now reckon that the first 25 bps may come in September, rather than June as previously anticipated.

Gold was a touch weaker this morning and continues to struggle to break back above $5,200. Instead, it has carried on consolidating sideways. Back on Tuesday, gold dropped sharply, briefly breaking below $5,100, having traded at $5,250 the day before. But it has managed to stabilise this week.

Considering the bullish perspective, it is worrying that gold has repeatedly failed to break and then hold above $5,200 on recent rallies. It has also failed to benefit much from geopolitical concerns due to US–Iran nuclear negotiations, along with the US military build-up across the region.

Source: TN Trader

These bullish factors may have been countered by the release of minutes from the Federal Reserve’s January meeting. These showed that members were in no rush to cut rates and even discussed the possibility of rate hikes if inflation remains sticky. This view was repeated by several FOMC members in speeches this week.

Silver has also consolidated this week, having broadly moved sideways, albeit with a slightly positive bias. There appears to be some mild support around $85 per ounce, and this has helped give the metal a lift, as has the daily MACD, which continues to push up off oversold levels.

The US dollar is rangebound and so hasn’t catalysed recent moves in precious metals. The question now is whether silver can bust above an area of resistance just below $90 and then hold above here on any subsequent pullback. 

That would be a bullish development, although it is far from clear if silver could then go on to make significant gains from there. Another failure to break through $90 convincingly looks likely to encourage fresh selling.

Source: TN Trader

Crude oil prices rebounded overnight. Yesterday afternoon, front-month WTI broke below $64 per barrel, having traded above $67 as recently as Tuesday. Crude prices dropped after testing resistance at a downward-sloping trendline.

This has been building for the past four years, coming off the highs hit soon after the latest Russian invasion of Ukraine. But buyers soon surged back in yesterday, taking WTI back up to resistance around $67.

Source: TN Trader

Traders were encouraged by news that the US and Iran had agreed to extend nuclear talks, reducing immediate fears of an outbreak of hostilities leading to a supply disruption. Negotiations resume in Vienna next week. Traders are also focused on the OPEC+ meetings this Sunday.

There has been speculation that members may resume production increases starting in April, having left quotas unchanged for the last three months. While OPEC+ estimates that supply and demand will be in balance throughout this year, the International Energy Agency maintains its forecast of an oversupply of 3.7 million barrels per day throughout 2026.

Bitcoin continued to consolidate overnight and has now spent most of the last two days hovering between $67,000 and $68,000. It briefly retested $70,000 on Wednesday and remains within striking distance of this key level. It would need to break and hold above here to encourage fresh buying, which may breathe some life into the currency.

Three weeks ago, it tested support at $60,000 for the first time in 16 months. It managed to hold above here, and since then, Bitcoin’s daily MACD has turned higher out of oversold territory. This is encouraging from a bullish perspective. But traders are conscious that a retreat from current levels, leading to a break of $60,000, could portend further weakness.

The March VIX continues to hold above 20, suggesting that while panic is absent, investor caution remains elevated. The index has held near the upper end of its recent range as traders digest sharp swings in large-cap technology stocks and ongoing geopolitical developments.

Recent declines in Nvidia and other AI-linked names have increased short-term uncertainty, particularly given how heavily concentrated index performance has been in mega-cap technology throughout the year. At the same time, geopolitical tensions involving the US and Iran, along with evolving tariff policy under President Trump, continue to add a layer of headline risk.

Investor attention now shifts back to inflation, highlighted by the US January Producer Price Index report. Economists expect headline PPI to rise 0.3% month-on-month, down from 0.5% in December, with Core PPI also forecast at 0.3%. The release will be closely scrutinised for signals about underlying price pressures and how that may affect the Federal Reserve’s policy trajectory.

Recent Federal Reserve commentary has reinforced a cautious stance, with officials emphasising that inflation remains above the 2% target and that rate cuts are not imminent. As a result, today’s inflation data could significantly influence expectations for further policy easing in 2026.

In Europe, investors are also monitoring inflation and labour market data from Germany and France, which could shape expectations for the European Central Bank’s next moves.

With February drawing to a close, markets are navigating a complex mix of cooling AI enthusiasm, geopolitical uncertainty, and inflation concerns. While Dell’s strong earnings provided a positive counterpoint to broader tech weakness, sentiment remains fragile. The coming data releases may offer a clearer picture of whether recent volatility marks a temporary pause in the rally or the beginning of a more sustained consolidation phase.