Stock averages moved higher, ahead of upcoming Nvidia results

Macroeconomic/ geopolitical developments

• US stocks ended the holiday-shortened week higher, with the Nasdaq Composite rising 1.51%, the S&P 500 gaining 1.07% and the Dow Jones Industrial Average adding 0.25%, as strength in growth and cyclical sectors offset defensive weakness amid firmer Treasury yields and improved sentiment following the Supreme Court’s tariff ruling.

• The US Supreme Court ruled 6–3 that President Donald Trump exceeded his authority under the International Emergency Economic Powers Act by imposing sweeping global tariffs, invalidating the duties and lifting markets, though the administration swiftly unveiled a new 10% tariff quickly raised to 15%) under the Trade Act of 1974, signalling ongoing trade policy uncertainty.
• Minutes from the Federal Reserve’s Federal Open Market Committee showed officials unanimously held rates at 3.50%–3.75% but were split on the outlook, with some favouring cuts later this year if inflation eases and others urging continued restraint, amid resilient growth, AI-driven investment, and lingering financial stability risks.

• US December PCE data showed Core Inflation at 3.0% year-on-year and headline Inflation at 2.9%, the highest in over a year, as modest consumer spending and a soft Q4 GDP print suggest persistent price pressures that could keep Federal Reserve interest rates elevated into mid-2026.

• Nvidia’s fiscal Q4 results, expected to show strong revenue and EPS growth amid robust AI-driven data centre demand, will be closely watched for guidance from CEO Jensen Huang and could influence broader S&P 500 tech sector sentiment.

Global financial market developments

• US and global equity averages were higher.
• US bond yields edged higher on the week while European yields nudged lower.
• The US Dollar Index moved higher over the week.
• Gold futures prices pushed up.
• Oil futures prices also rallied through the week to a multi-month high.

Key this week

Central Bank Watch: It is a relatively light week on the monetary policy front, with the main highlight being the People’s Bank of China Interest Rate Decision on Tuesday, alongside a series of scheduled speeches from officials at the Federal Reserve, European Central Bank and Bank of England.

Geopolitics Watch: The State of the Union address from US President Donald Trump is on Tuesday

Macro Data Watch: Macro releases are light this week, with the key reports to watch coming Friday, including Japan and Germany’s CPI, Canada’s GDP, and the US PPI.

Earnings Watch: US fourth-quarter earnings season continues this week, highlighted by Nvidia reporting on Wednesday, alongside notable results from Home Depot and Berkshire Hathaway B.

Steve Miley (The Market Chartist)

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued