Closing Recap
Wall Street held its breath, and the “King of AI” delivered. U.S. stocks finished solidly higher on Wednesday, with the Nasdaq climbing nearly 1% and the Semiconductor Index (SOX) hitting a new all-time high ahead of the main event: Nvidia earnings. After the bell, Nvidia crushed expectations again, guiding Q1 revenue significantly above consensus, proving the AI capex supercycle is far from over. This micro-level euphoria is battling a complex macro backdrop. While equities cheered, the “Anti-Paper” trade went vertical: Gold reclaimed $5,200, Silver ripped 4%, and Bitcoin staged a massive 8% short-squeeze to challenge $69,000. Geopolitical tension remains the “wildcard” as US-Iran talks loom and President Trump doubles down on tariffs, but for now, the market is purely focused on the AI growth engine.
Key Takeaways
- Tech Rebounds, Semiconductors Hit All-Time Highs: The Nasdaq jumped nearly 1%, led by a surge in semiconductor stocks which hit new record highs ahead of Nvidia’s crucial earnings report.
- Nvidia Delivers the Goods: The AI trade is alive and well. Nvidia reported Q4 revenue of $68.1B (up 73% year-over-year) and projected Q1 revenue of $78B, beating the $72.8B estimate. Data center revenue surged 75%, silencing bears who bet on a capex slowdown.
- Trump Doubles Down on Global Tariffs: In his State of the Union address, President Trump confirmed that the U.S. is pushing ahead with a 10% global levy and aims to raise it to 15%, keeping trade war fears front and center.
- Precious Metals Explosion: Gold surged $50 to settle at $5,226, while Silver jumped 4% to nearly $91. Bank of America just dropped a bombshell forecast, seeing Gold hit $6,000 and Silver rebounding above $100/oz this year.
- Bitcoin’s “Lazarus” Squeeze: Bitcoin woke up from its coma, surging over 8% to reclaim $69,000. Over $468 million in shorts were liquidated as the crypto-asset decoupled from recent weakness, eyeing the $70k psychological barrier.
- Pound Rebounds on Soft UK Inflation: UK Inflation fell sharply to 3.0% (vs 3.4% prior), ramping up bets for a BoE rate cut in March to 80%. Paradoxically, GBP/USD bounced as the “sell the rumor, buy the fact” crowd stepped in.
- BOJ Hawkish Pivot? Overnight comments from BOJ Governor Ueda and board member Takata were hawkish, hinting that March/April meetings are “live” for hikes. This boosted the Yen in Asian trading.
- Yen Weakens as BoJ Hike Bets Recede: The Japanese yen lost ground as market pricing shifted, with traders now seeing an 87% chance that the BoJ will keep rates unchanged at its March meeting.
- Oil’s Inventory Shock: WTI Crude dipped 0.3% to $65.42 after the EIA reported a massive 16.0 million barrel inventory build (vs 1.5M exp) – the largest since Feb 2023. Only the Iran war premium is keeping oil from collapsing further.
- Fed Chair Speculation Continues: Betting markets now see a 78% chance of Kevin Warsh being confirmed as Fed Chair by June 1, maintaining uncertainty over the future path of monetary policy.
- BofA Sees Silver Rebounding Above $100: Bank of America analysts forecast that silver could overcome near-term risks and surge back above the $100/oz mark this year.
- CME Globex Outage: A technical glitch halted metals and energy trading on CME Globex yesterday, adding to the chaotic volatility in commodities.
Market Overview
Wednesday’s session was characterized by a tug-of-war between micro-level optimism and macro-level uncertainty. The bullish sentiment was driven by the technology sector, where investors aggressively bought the dip ahead of Nvidia’s earnings. The fact that the semiconductor index hit a new all-time high suggests that the market’s faith in the AI supercycle remains largely intact, despite recent wobbles and valuation concerns. The market has split into two distinct high-velocity trades: The “AI Growth” trade (Long Nvidia/Semis) and the “Fiat Debasement” trade (Long Gold/Bitcoin). Investors are effectively betting that the AI boom will continue regardless of what the Fed or politicians do, while simultaneously hedging against tariff-induced inflation via hard assets.
| Index | Up/Down | % | Last |
| DJ Industrials | 307.77 | 0.63% | 49,482 |
| S&P 500 | 56.13 | 0.48% | 6,946 |
| Nasdaq | 288.40 | 0.95% | 23,152 |
| Russell 2000 | 11.00 | 0.41% | 2,663 |
However, the macroeconomic and geopolitical backdrop remains fraught with risk. President Trump’s State of the Union address confirmed his commitment to aggressive trade policies, shifting the focus to a new legal framework (Section 122) to implement a global tariff that he hopes to raise to 15%. This ongoing trade friction is a major headwind for global growth and is keeping the U.S. dollar on the defensive. The dollar’s weakness, in turn, continues to fuel the incredible rally in precious metals, with gold and silver continuing to act as the ultimate safe havens against policy uncertainty and potential currency debasement. The market is also closely watching the Middle East, where U.S.-Iran nuclear talks loom as a potential flashpoint. With the Fed’s policy path also uncertain, the market remains heavily reliant on the continued outperformance of a few key tech giants.
Economic Calendar
With Nvidia out of the way, the focus shifts back to the Fed’s inflation fight and the “last ditch” diplomatic efforts in Geneva.
Data Released Yesterday / Overnight:
- UK CPI (Jan): A major downside surprise, with headline inflation dropping to 3.0% y/y (vs 3.4% prior), solidifying bets for a March BoE rate cut.
- Australian Q4 Capex: Beat expectations, rising +0.4% q/q, a positive sign for the Australian economy.
- Japanese BoJ Comments: Policymakers offered mixed signals, but market pricing for a March rate hike has largely evaporated.
Today’s Economic Calendar:
- European Session: An extremely light calendar with only low-tier data.
- U.S. Session: The main highlight is the weekly U.S. Jobless Claims report.
- 13:30 GMT (8:30 ET) – US Initial Jobless Claims. Est: 216k.
- 13:30 GMT – US Q4 GDP (Revision).
- 15:00 GMT – Pending Home Sales.
- Throughout Day – Fed Speakers: Schmid, Musalem, Barkin.
After the Close:
- Nvidia Earnings (Wednesday Evening): A blockbuster report, with Q4 revenue surging 73% y/y to $68.13B, and Q1 guidance topping estimates, confirming strong AI demand.
Asset Class Spotlight: FX, Commodities, Bonds & Crypto
The “Supercycle” is back on. Precious metals continue their historic run. Gold futures gained nearly 1% to settle at $5,226.20 an ounce, ignoring the “higher for longer” Fed rhetoric, while silver surged nearly 4%. The metals are acting as the primary safe haven against the backdrop of erratic U.S. trade policy and geopolitical risks. BofA’s call for $100 Silver has ignited speculative fervor. Crude oil prices slipped slightly, with WTI settling at $65.42 a barrel, as a massive 16-million-barrel build in U.S. crude stockpiles offset fears of a potential military conflict with Iran.
| Asset | Up/Down | Unit / % Change | Last |
| WTI Crude | -0.21 | -0.32% | 65.42 |
| Gold | 49.90 | 0.97% | 5,226.20 |
| EUR/USD | 0.0028 | 0.24% | 1.1799 |
| USD/JPY | 0.55 | 0.35% | 156.43 |
| Bitcoin | 4,000+ | 8.0%+ | 69,000+ |
| 10-Year Note Yield | 0.013 | 0.32% | 4.046% |
The U.S. dollar remained under pressure as the market digested President Trump’s tariff plans, while the pound found support from dovish BoE bets.
- EUR/USD: The pair is holding a positive bias above 1.1800. The euro is benefiting from the broad weakness in the U.S. dollar, which is being driven by the uncertainty surrounding Trump’s trade policies.Massive option expiries between 1.1800-1.1825 ($5B+) are acting as a magnet. It’s a “do nothing” pair until the options roll off at 10 AM ET.
- GBP/USD: The pound recovered toward the 1.3600 level. The sharp drop in UK inflation has cemented expectations for a March BoE rate cut, but the broad dollar weakness is providing a strong tailwind for the cable.The market had already fully priced in the BoE cuts, leading to a “sell the rumor, buy the fact” squeeze.
- USD/JPY: The pair is advancing back toward the 156.50 level. The yen is faltering as market pricing for a near-term BoJ rate hike fades, and political uncertainty in Japan adds to the currency’s woes. The divergence between a potentially hiking BOJ and a political Fed is increasing volatility.
- AUD/USD: Capex Drag. The Aussie is lagging slightly after Business Capex data showed a drop in plant machinery spending, cooling some of the RBA hawkishness.
Cryptocurrencies: After a brutal period of selling, the crypto market saw a significant rebound. Bitcoin surged over 8% to reclaim the $69,000 level. The move was fueled by a massive short squeeze, with nearly $468 million in short liquidations triggering a rapid, albeit potentially fragile, relief rally.
Treasuries: U.S. Treasury yields edged higher as the market balanced the strong tech rebound against ongoing geopolitical and trade concerns. The benchmark 10-year yield rose slightly to 4.046%.
Looking Ahead
Today’s trading will be dominated by the market’s reaction to Nvidia’s blockbuster earnings report. The strong beat-and-raise should provide a powerful tailwind for the technology sector and the broader market. However, investors will also be keeping a close eye on the third round of U.S.-Iran nuclear talks in Geneva, as any signs of an imminent conflict could quickly reverse the risk-on mood. With the U.S. Jobless Claims data also on tap, the market remains in a highly volatile and headline-driven state.
What to Watch Today
- Nvidia Fade or Follow-Through? NVDA is up in pre-market. If it reverses and goes red, it’s a major “blow-off top” signal for the broader market. If it holds, 23,500 on the Nasdaq is the target.
- Silver @ $92: Silver cleared $90. The next major resistance is $92. If it clears that, the BofA $100 target becomes the primary narrative.
- Bitcoin $70k Rejection: BTC failed at $70k yesterday. It needs to break this level with conviction to confirm the trend reversal.
- US-Iran Headlines: Any news of a “walkout” or “deadlock” in Geneva will send Oil and Gold higher.
- Jobless Claims: Expected to be 216k. A low number reinforces the “No Landing” scenario; a high number brings recession fears back.