Asian stocks pushed higher on Wednesday despite the renewed artificial intelligence worries gripping international markets, while oil prices were under pressure after Iran touted progress in nuclear negotiations with the United States. The New Zealand dollar sank after the central bank said monetary policy needs to remain accommodative for some time to support the economic recovery. Japan’s benchmark Nikkei 225 index rose 0.93% to 57,090.14, poised to snap a three-day skid, while Australia’s S&P/ASX200 was up 0.5%. Mainland China, Hong Kong, Singapore, Taiwan and South Korean were among markets closed for Lunar New Year holidays. The positive start in Asia followed a lackluster session on Tuesday on Wall Street as investors grappled with the outlook for the AI boom.
The S&P 500 inched higher on Tuesday, but declines in software stocks kept the index’s gains in check. The broad market benchmark advanced 0.1% and closed at 6,843.22, while the Nasdaq Composite ticked 0.14% to close at 22,578.38. The Dow Jones Industrial Average climbed 32.26 points, or 0.07%, and settled at 49,533.19. Investors rotated out of beaten-down software names, which added to the losses they’ve seen this year, and into financial stocks such as Citigroup and JPMorgan. Shares of Citi jumped 2.6%, while shares of JPMorgan were up more than 1%.
Gold rose to around $4,900 per ounce on Wednesday, recouping some losses from a two-day decline, likely due to dip buying as markets reassessed the Federal Reserve’s monetary policy direction. Federal Reserve Governor Michael Barr said rates should remain on hold “for some time” until inflation shows progress toward the 2% target, while Chicago Fed President Austan Goolsbee suggested additional cuts may be possible later this year if that trend continues. Investors are now watching further Fed remarks, FOMC minutes, and key GDP and PCE data due later this week for more guidance. Meanwhile, short-term demand for precious metals eased as China’s Lunar New Year holiday began, with lower liquidity expected while Chinese investors are off for most of the week.
WTI crude oil futures hovered above $62 per barrel on Wednesday, pausing losses from recent sessions as investors assessed the outcome of US-Iran talks on Tehran’s nuclear program. Iranian authorities said a “general agreement” had been reached with Washington on the outlines of a potential deal, while a US official indicated talks would resume in Geneva in two weeks with a new proposal. Still, some uncertainty lingered despite the diplomatic progress, given ongoing military developments, with Iran temporarily closing part of the Strait of Hormuz for drills and the US deploying a second aircraft carrier. Markets also monitored ongoing US-mediated Ukraine-Russia talks in Geneva.
Iran partially closed the strategically vital Strait of Hormuz on Tuesday, state media reported, citing “security precautions” as Tehran’s Revolutionary Guard conducts military drills in the waterway. It comes as the U.S. and Iran hold talks in the Swiss city of Geneva, seeking to resolve an ongoing dispute over Tehran’s nuclear program. It marks the first time Iran has shut parts of the Strait of Hormuz, a major international waterway that links crude producers in the Middle East with key markets across the globe, since U.S. President Donald Trump threatened Tehran with military action in January. Located in the gulf between Oman and Iran, the strait is recognized as one of the world’s most important oil choke points.
Japanese exports climbed 16.8% year on year in January, sharply beating market expectations and growing at their fastest rate since November 2022 as shipments to Asia and Western Europe surged, government data on Wednesday showed. Growth was higher than December’s 5.1%, and beat Reuters-polled economists’ estimates of 12%. Value of exports to China, Japan’s largest trading partner, jumped 32%, after rising 5.6% in December at a time when the two countries are locked in a diplomatic standoff over Prime Minister Sanae Takaichi’s comments over Taiwan. Shipments to the U.S. fell 5%, after declining 11.1% in December. Washington is Japan’s second largest trading partner. Region-wise, a near 26% jump in shipments to Asia and over 25% to Western Europe helped accelerate exports growth, and more than offset the 3.3% decline in North America.
U.S. homebuilder sentiment deteriorated in February, weighed down by persistently high land and construction costs as well as still-elevated house prices relative to incomes that are keeping prospective buyers on the sidelines, a survey showed on Tuesday. The National Association of Home Builders/Wells Fargo Housing Market index eased one point to 36 this month, remaining below the 50 break-even point for 22 straight months. Economists polled by Reuters had forecast the index climbing to 38. Confidence has remained depressed despite attempts by the Trump administration to make housing more affordable, including purchases of mortgage-backed securities and banning institutional investors from buying single-family homes.
Millions of files related to the late sex offender Jeffrey Epstein suggest the existence of a "global criminal enterprise" that carried out acts meeting the legal threshold of crimes against humanity, according to a panel of independent experts appointed by the United Nations Human Rights Council. The experts said crimes outlined in documents released by the U.S. Justice Department were committed against a backdrop of supremacist beliefs, racism, corruption and extreme misogyny. The crimes, they said, showed a commodification and dehumanization of women and girls. "So grave is the scale, nature, systematic character, and transnational reach of these atrocities against women and girls, that a number of them may reasonably meet the legal threshold of crimes against humanity," the experts said in a statement.
Palo Alto Networks trimmed its annual profit forecast on Tuesday, signaling rising costs from recent acquisitions to enhance AI capabilities, sending the cybersecurity company’s shares down around 7% in extended trading. The company announced on Tuesday the acquisition of Israeli cybersecurity startup Koi, following last July’s purchase of CyberArk Software in its largest deal to date and the buyout of Chronosphere in November, as it steps up efforts to counter AI-driven cyber threats. Palo Alto said acquisition-related costs jumped to $24 million in the second quarter, from $10 million a year earlier. While acquisitions expand the total addressable market, the company has acknowledged the challenge of effectively integrating larger acquired companies, such as CyberArk, which require more reengineering and restructuring.
Warner Bros Discovery on Tuesday rejected Paramount Skydance’s latest $30-a-share hostile bid, but gave the rival Hollywood studio seven days to submit a "best and final" offer to top an existing agreement to sell its businesses including HBO Max and "Harry Potter" franchise to Netflix. Paramount informally broached an even higher per-share price of $31, Warner Bros said, apparently enticing the board to the table. But its response to Paramount indicates Warner Bros prefers its deal with Netflix, and the odds of a switch are long. Warner Bros Discovery’s shares were up 3.4% at $28.93, while Paramount rose nearly 5%. Netflix shares were largely flat in afternoon trading. Paramount has until February 23 to make a new offer, which Netflix is allowed to match under the terms of the merger agreement, Warner Bros said.
Nvidia on Tuesday said it has signed a multiyear deal to sell Meta Platforms millions of its current and future artificial intelligence chips, including central processing units that compete with products from Intel and Advanced Micro Devices. Nvidia did not disclose a value for the deal, but said it includes its current Blackwell chips as well as its forthcoming Rubin AI chips. It also includes standalone installations of its Grace and Vera central processors. Nvidia introduced those central processors, based on technology from Arm Holdings, as companions to its AI chips starting 2023. But the announcement Tuesday signalled that Nvidia aims to push those chips for emerging fields such as running AI agents as well as into markets for processors used in workaday technical tasks such as running databases.
Tesla will avoid a 30-day suspension of its dealer and manufacturer licenses in California after the U.S. electric vehicle maker stopped using the term "autopilot" in marketing of its vehicles in the state, a regulator said on Tuesday. The reprieve from the California Department of Motor Vehicles (DMV) comes as Tesla and other EV makers grapple with a plunge in demand following the expiration of key tax credits that had boosted sales. Tesla CEO Elon Musk has switched the company’s focus toward robotaxis equipped with self-driving technology, as well as humanoid robots. In 2022, the DMV accused Tesla of misleading consumers by using names "autopilot" and "Full Self-Driving" (FSD) for its advanced driver-assistance features.