Tuesday saw mixed trading across the three major US indexes, with Apple Inc. briefly touching a $5 trillion market cap during the session, just one day after surpassing Nvidia Corp. to become the world's most valuable publicly traded company.
US Markets: At the closing bell, the Dow Jones Industrial Average rose 537.24 points, or 1.03%, to 52,747.32. The Nasdaq Composite fell 55.17 points, or 0.22%, to 24,876.91. The S&P 500 added 15.60 points, or 0.21%, ending at 7,428.78. SK Hynix Inc. dropped 8.98%, while Micron Technology Inc. declined 8.85%. SanDisk Corp. (SNDK.US) slid 14%, erasing more than 50% from its all-time high set just one month ago. The Nasdaq Golden Dragon China Index closed up 1.08%, with NetEase Inc. gaining nearly 3%.
European Markets: Germany's DAX 30 gained 60.80 points, or 0.24%, to 25,485.21. The UK's FTSE 100 rose 95.01 points, or 0.88%, to 10,876.76. France's CAC 40 added 52.72 points, or 0.63%, to 8,458.78. The Euro Stoxx 50 climbed 13.04 points, or 0.21%, to 6,295.25. Spain's IBEX 35 edged up 1.34 points, or 0.01%, to 19,742.64. Italy's FTSE MIB fell 344.95 points, or 0.66%, to 51,710.00.
Asian Markets: Japan's Nikkei 225 rose 0.5%, while South Korea's KOSPI index added 0.97%.
US Dollar Index: The dollar index, which measures the greenback against six major currencies, fell 0.12% to 101.417 in late trading. In New York late trade, the euro bought $1.1387, up from $1.1368 in the previous session. Sterling traded at $1.3289, up from $1.3288. The dollar bought 163.86 Japanese yen, up from 163.78. Against the Swiss franc, the dollar was unchanged at 0.8190. The dollar weakened against the Canadian dollar, trading at 1.4105 versus 1.4125, and fell against the Swedish krona to 9.6954 from 9.7285.
Cryptocurrencies: Bitcoin edged up 0.32% to $63,996, while Ethereum rose 1.7% to $1,925.88.
Crude Oil: West Texas Intermediate crude for September delivery dropped $3.35, or 4.06%, to settle at $79.26 per barrel on the New York Mercantile Exchange. Brent crude for September delivery fell $4.27, or 4.83%, to $84.09 per barrel in London. The pattern of three consecutive daily declines has been established.
Precious Metals: Spot gold traded at $4,028.80 per ounce, while spot silver was at $57.134 per ounce.
Macro News: Goldman Sachs remains bullish on Japan's AI sector, viewing the recent sell-off as a buying opportunity. The investment bank stated that the sharp decline in Japanese AI-related stocks has created a chance to buy, as strong earnings prospects may revive investor interest in semiconductor equities. Bruce Kirk, Goldman's chief Japan equity strategist, noted that the pullback has lowered the bar for earnings to impress investors, putting many AI stocks at levels where positive surprises could have a greater impact on share prices. "As long as you don't believe the geopolitical situation will materially deteriorate, current levels seem like a good time to add to certain positions," Kirk said. "We don't think the AI story is over." He expects investor focus to shift back to fundamentals. "Ultimately, it all comes down to earnings," he said. "At much lower levels than late June, strong results should refocus investors on the AI earnings story." However, Kirk anticipates short-term volatility to persist due to still-crowded investor positions. Data from Goldman's prime brokerage shows total and net hedge fund exposure to Japan are both above the 98th percentile of their five-year range, representing historically elevated levels.
Employees from OpenAI and Anthropic are circulating a petition urging the US government to support a mechanism for "consciously regulating" the pace of artificial intelligence development to prevent the technology from advancing too quickly. According to sources and a copy of the petition, staff at several top AI labs have sent an open letter to peers calling for US support of an international effort to build more advanced AI systems. The document warns that the speed of AI development could outpace humanity's ability to "understand or control" it, posing a "real risk," and highlights progress in AI research automation. The petition reads: "The US government should support an international cooperation to develop the necessary technical and governance tools to consciously regulate the frontier of automated AI development."
A media survey indicates that analysts have lowered their gold price forecasts for the first time since late 2023, following a sharp retreat from January's record highs, though most expect central bank buying and concerns over fiscal sustainability to provide support. In a survey of 29 analysts and traders over the past three weeks, the median gold price forecast for 2026 was $4,509 per ounce. This is down from $4,916 in the previous quarter, marking the first downgrade in 11 quarters. The average forecast for 2027 was $4,610, down from $5,100 in the prior survey. Gold hit an all-time high of $5,595 per ounce in January but suffered its worst quarterly performance since 2013 in the second quarter, as the Iran conflict intensified energy inflation and pushed up rate hike expectations. Since the start of the war, spot gold has fallen approximately 22%.
Stock Highlights: Seagate Technology Holdings PLC reported a surge in fourth-quarter profit, driven by AI-fueled demand for data storage. Net income for the fiscal fourth quarter was $1.29 billion, or $5.58 per share, sharply higher than the $488 million, or $2.24 per share, a year earlier. Adjusted earnings per share came in at $5.71, topping the analyst estimate of $5.10. Revenue rose to $3.629 billion from $2.44 billion, also exceeding the Wall Street consensus of $3.5 billion. The company forecast fiscal first-quarter revenue of $4.1 billion, plus or minus $100 million, and adjusted earnings per share of $7.30, plus or minus 20 cents. Driven by the AI boom exacerbating supply shortages, hard drive manufacturers like Seagate have seen revenue and profits soar. Persistent capacity constraints have led to higher prices for customers across various industries, boosting net margins for producers. CEO Dave Mosley stated, "As AI accelerates the generation and value of data, there is enduring long-term demand for high-capacity storage." Seagate shares rallied in after-hours trading, at one point gaining more than 10%.
Nvidia Corp. CEO Jensen Huang reiterated his support for open-weight AI models, arguing they are crucial for advancing the still-early-stage AI industry. Following a meeting with US lawmakers in Washington on Tuesday, Huang said open-weight models are important for ensuring AI is safely and reliably deployed across the economy. In brief comments to reporters, Huang stated, "For the US industry, we need open weights for safety, and we need open weights to ensure its safety and reliability. At the same time, this is also very important for keeping the entire industry vibrant."
Alphabet Inc.'s Google has reportedly committed to guaranteeing up to $44 billion in third-party data center lease payments in the event of tenant default. According to reports, this figure is up from $6.5 billion as of the end of September, reflecting Google's efforts to offer alternatives to Nvidia's AI chips to companies like Anthropic. Google has taken on these commitments, known as "backstop guarantees," to scale up its TPU sales. Two sources revealed that Google made these commitments based on the expectation that revenue from TPU sales would exceed the financial obligations from guaranteeing leases for data centers housing these chips. One source said company executives are confident the financial calculus benefits Alphabet. Reports suggest Alphabet has provided lease guarantees for approximately 2.4 gigawatts of capacity across roughly ten projects. None of these projects are currently completed, meaning Alphabet's guarantees have not yet been activated.
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