- AI Hopes Drive Stocks Higher Despite China Fears: Markets Wrap
Asian stocks edged higher as optimism over more artificial intelligence spending under Donald Trump offset
fears over the impact of tariffs on China. Shares in Taiwan and Japan led gains, lifted by technology stocks
after Trump announced a new investment push for artificial intelligence. But Chinese shares bucked the
trend, with the benchmark CSI 300 Index declining as much as 1.3% before paring losses. The broad MSCI
Asia Pacific Index was up around 0.2%. The divergent fortunes of Asian stock markets underscore the difficult
questions investors will be forced to weigh up over the coming months, when the Trump administration is
expected to make a series of sweeping policy changes. The decline in Chinese shares came after the US
president said he was still considering a 10% tariff on all goods from the country. - Dow surges 500 points as Wall Street wagers that Trump’s approach on tariffs won’t be as harsh as
feared
Stocks advanced on Tuesday as Wall Street viewed President Donald Trump’s comments and first-day actions
around international trade as a bit softer than initially believed. The Dow Jones Industrial Average added
537.98 points, or 1.24%, to finish at 44,025.81. The S&P 500 gained 0.88% to end at 6,049.24, while the
Nasdaq Composite rose 0.64% to 19,756.78. 3M climbed more than 4% after earnings came in better than
analysts expected. Small-cap stocks also participated in Tuesday’s rally, with the Russell 2000 rising about
1.9%. Several big technology stocks also took a leg up, with Amazon and Nvidia each gaining more than 2%.
But a drop of more than 3% in Apple on the back of two Wall Street downgrades restricted gains for the tech
heavy Nasdaq. - Oil prices steady as investors debate Trump 2.0 policies
Oil prices were little changed in early trading on Wednesday as markets weighed U.S. President Donald
Trump’s declaration of a national energy emergency on his first day in office and its impact on supply.
Brent crude futures eased 3 cents, to $79.26 per barrel, while U.S. West Texas Intermediate crude futures
(WTI) for March delivery eased 9 cents to $75.74 at 0120 GMT. Trump on Monday laid out a sweeping plan to
maximize oil and gas production, including by declaring a national energy emergency to speed permitting,
rolling back environmental protections, and withdrawing the U.S. from the Paris climate pact.
The policy is, however, unlikely to spur near-term investment or change U.S. production growth, analysts at
Morgan Stanley wrote in note, adding that it could, however, moderate potential erosion of refined product
demand. Analysts also questioned if Trump’s promise to refill the strategic reserve would make any changes
to oil demand as the Biden administration was already purchasing oil for the emergency stockpile.
Investors also remained cautious as Trump’s trade policy remained unclear. He said he was thinking of
imposing 25% tariffs on imports from Canada and Mexico from Feb. 1, rather than on his first day in office as
previously promised. The U.S. president also added that his administration would “probably” stop
buying oil from Venezuela, among the top suppliers of oil to the country. - Gold jumps to 11-week peak amid Trump policy uncertainty, soft dollar
Gold prices climbed to a fresh 11-week peak on Wednesday, boosted by safe haven demand amid
uncertainty surrounding U.S. President Donald Trump’s trade policies and a softer dollar. Spot gold added
0.1% to $2,748.18 per ounce as of 0236 GMT, after hitting its highest since Nov. 5, 2024 earlier in the
session. U.S. gold futures gained 0.1% to $2,762.90. - BOJ Heads Toward Rate Hike as Markets Take Trump in Stride
Bank of Japan Governor Kazuo Ueda is on track to raise interest rates to the highest level since 2008 on
Friday, after global financial markets responded with relative calm to US President Donald Trump’s return to
the White House. Ahead of Trump’s inauguration, BOJ officials saw a good chance of a rate hike at the end of
this week’s two-day meeting, provided the president didn’t unleash too many negative surprises, people
familiar with the matter told Bloomberg earlier this month. Government officials will also go along with an
increase this week, people familiar with the matter said in comments that followed the inauguration. Should
the hike materialize as widely expected, this would be Ueda’s third rate move in less than 12 months, after 17
years without an increase before last March. A quarter-percentage point hike in the overnight rate to 0.5%
would also be the biggest increment since 2007 as the BOJ makes steady progress toward normalization just
as the Federal Reserve and the European Central Bank start to mull a pause in their easing cycles. The yen has
weathered the turmoil of Trump’s first days in office. It ended Tuesday little changed against the dollar after
earlier outperforming all its Group-of-10 currency peers as traders wagered that the president’s first salvo of
policy changes wouldn’t stop a potential rate hike from the BOJ. Japan’s Topix share index added to
Tuesday’s limited gains to be up around 0.9% Wednesday lunchtime, while bond yields also edged up. - Trump’s climate retreat stirs a sense of déjà vu and prompts a warning from the UN
U.S. President Donald Trump on Monday signed an executive order to pull the U.S. out of the world’s
biggest coordinated effort to tackle rising temperatures. “Anyone who steps back from this significant
forward momentum creates a vacuum that others will fill and will benefit from,” United Nations Climate
Change Executive Secretary Simon Stiell said Tuesday. Insurance giants downplayed the immediate
impact of Trump’s climate retreat. “It’s tougher but the gentleman has done it before, and the world
knows it has to improve itself,” Allianz’s Oliver Bate told CNBC in Davos. - Trump says he’s considering a 10% tariff on China beginning as soon as Feb. 1
President Donald Trump said that his team was discussing a 10% tariff on China and that the duty could take
effect as early as Feb. 1. “We’re talking about a tariff of 10% on China based on the fact that they’re sending
fentanyl to Mexico and Canada,” the president said, speaking to reporters at the White House on Tuesday
evening. “Probably Feb. 1 is the date we’re looking at,” he added. Fentanyl, a synthetic opioid, is an addictive
drug that’s led to tens of thousands of overdose deaths each year in the U.S. Reducing illicit supplies of the
drug, precursors of which are mostly produced in China and Mexico, has become an area in
which Washington and Beijing have agreed to cooperate. Trump said Friday that he spoke with Chinese
President Xi Jinping over the phone about fentanyl and trade. The Chinese side’s readout said Xi called for
cooperation and cast the two countries’ economic ties as mutually beneficial. - India about to sell Russia-backed BrahMos cruise missiles
India is considering a $450 million deal to sell Russian-backed supersonic cruise missiles to Indonesia as the
Southeast Asian country looks to bolster defenses, according to people familiar with the matter. The sale of
the BrahMos cruise missiles is expected to be announced as early as this week when Indonesian President
Prabowo Subianto officially visits India, the people said, asking not be identified as discussions are private.
Prabowo is set to attend the Republic Day celebrations as a special guest on Sunday. A key hurdle for
Indonesia is securing financing for the missile purchases given the nation’s budget constraints, one of the
people said. Funding is still being discussed with India and it’s unclear when a deal can be finalized for the
missiles, which have a firing range of at least 380 kilometers (186 miles). - Oracle stock climbs 7% as Trump is expected to announce its joint AI venture with OpenAI and Softbank
Oracle (ORCL) stock closed up by more than 7% on Tuesday amid reports of a joint venture with OpenAI and
Softbank (SFTBY). The three tech companies are planning a joint venture called Stargate for artificial
intelligence infrastructure in the U.S., CBS News (PARA) first reported. Oracle co-founder Larry Ellison is
expected to join President Donald Trump at the White House for the announcement alongside OpenAI chief
executive Sam Altman and Softbank chief executive Masayoshi Son. During an appearance on Fox & Friends
(FOXA) Tuesday morning, White House press secretary Karoline Leavitt said Trump will make a “big”
infrastructure announcement. The tech executives will reportedly announce a plan to initially commit $100
billion to Stargate — a number that could grow up to $500 billion over the next four years of Trump’s
presidency. The joint venture is reportedly expected to include additional investors. A source told CBS News
that the first Stargate project will be a data center in Texas. Softbank and Oracle did not immediately respond
to a request for comment. OpenAI declined to comment. On his first day back in office, Trump issued a slate
of executive orders, including one declaring a national energy emergency that approves executive
department and agency heads to use “any lawful emergency authorities available to them” to start leasing,
siting, producing, and generating U.S. energy resources — including on federal land. Trump also rescinded
the Biden administration’s 2023 executive order on AI safety and security as part of a sweeping revocation of
the previous administration’s executive orders and actions. NetChoice, a trade organization representing tech
companies such as Amazon (AMZN), Google (GOOGL), and Meta (META), said the executive orders targeting
the Biden administration’s regulations on U.S. energy production and “artificial intelligence (AI) red tape” are
“critical” for the U.S. to lead in technological development. - Netflix to hike prices on standard and ad-supported streaming plans
Netflix is hiking the price of most of its U.S. plans. The streaming giant announced on Tuesday that its
standard plan without commercials will increase from $15.49 a month to $17.99. Its cheaper, ad-supported
plan, which was more recently introduced to attract more subscribers, will increase from $6.99 per month to
$7.99. In addition, the monthly cost of Netflix’s premium plan will increase from $22.99 to $24.99. The
company, which reported fourth-quarter earnings on Tuesday, said it will also raise prices in Canada, Portugal
and Argentina. Consumers have been faced with numerous price hikes in recent years across major
streaming services including Netflix and its competitors, including Disney’s apps and Warner Bros.
Discovery’s Max. Streamers have increasingly turned to higher prices and ad-supported plans as they look to
reach profitability. - Space stocks surge after Trump inauguration with ‘broad excitement’ about sector, analyst says
Pure-play space stocks flew higher on Tuesday, a rally that a Wall Street analyst pinned to exuberance around
the sector after President Donald Trump’s inauguration. “Post the election, there seems to be this very deep
and broad excitement about opening up private space opportunities,” Deutsche analyst Edison Yu told CNBC.
“It’s not just the headlines. When you talk to any [venture capital] investor, any institutional investor, any
family office … it just seems like everybody has kind of gotten much more interested and excited [about]
space,” said Yu, whose coverage includes six space companies: BlackSky, Iridium, Planet, Rocket
Lab, Telesat and Viasat. Several of the sector’s stocks climbed nearly 20% or more without clear individual
catalysts, including Mynaric, Rocket Lab, Momentus, Intuitive Machines, Planet and Sidus. Redwire, up 51.4%,
was the day’s top performer after it announced its planned acquisition of defense technology company Edge
Autonomy for nearly $1 billion and, as a result, forecast full-year 2025 revenue may reach as much as $605
million, about double from last year. Investors also boosted Viasat, up 32.9%, as it reiterated that NASA
selected itas one of four companies for a five-year communications contract worth as much as $4.8 billion, to
provide satellite connectivity services as part of the “Near Space Network.” Trump briefly addressed space in
his inauguration speech, but did not mention NASA or the space agency’s Artemis program, its current top
priority that aims to return astronauts to the moon. “We will pursue our manifest destiny into the stars,
launching American astronauts to plant the Stars and Stripes on the planet Mars,” Trump said, with SpaceX
CEO Elon Musk cheering in the audience behind him. - Apple Loses Top-Stock Crown as Analysts Downgrade on iPhone Risk
Apple Inc. received a pair of analyst downgrades, in the latest sign that soft iPhone sales are becoming an
increasing concern for investors, as artificial intelligence fails to act as a hoped-for growth catalyst. Shares fell
3.2% on Tuesday, closing at its lowest since November amid a rocky start to the year. The stock is down 11%
in January, putting it on track for its biggest one-month decline since December 2022. It has dropped 14%
from a December peak. The day erased more than $110 billion from the company’s market capitalization,
enough for it to close under Nvidia Corp. in size for the first time since November. Apple now has a valuation
of $3.35 trillion, compared with $3.45 trillion for the AI-focused chipmaker. The company was downgraded to
hold at Loop Capital and cut to underperform at Jefferies, which became a rare firm with the equivalent of a
sell rating on the stock. Just 8.5% of the analysts tracked by Bloomberg have a bearish rating, while about
63% have the equivalent of a buy. Jefferies analyst Edison Lee writes that recent weakness in iPhone sales
has been worse than expected, with the China market a particular concern. Independent research indicates
that iPhone sales sank 18.2% in China during the December quarter, while global unit sales fell about 5% in
the final quarter of last year amid higher China competition. - FDA approves Johnson & Johnson’s nasal spray for depression as standalone treatment
The Food and Drug Administration on Tuesday approved Johnson & Johnson’s nasal spray to be used alone in
adults with a major depressive disorder that is difficult to treat, as sales of the drug grow. The spray, called
Spravato, is now the first-ever standalone therapy for treatment-resistant depression, which is when trying at
least two standard treatments does little to nothing to improve depression symptoms in a patient.
Previously, Spravato was cleared in the U.S. to use together with an oral antidepressant for both treatment
resistant depression and for people with major depressive disorder who are experiencing thoughts of suicide
or harm. The drug first entered the U.S. market in 2019. “We want to recognize that this is a medicine that
treats a disease that [when] left untreated, depression is potentially fatal,” Bill Martin, J&J’s global
therapeutic area head of neuroscience, said in an interview. Around one-third of the estimated 21 million
U.S. adults with major depression battle symptoms — such as persistent feelings of sadness, sleep
disturbances, low energy and thoughts of death or suicide — that don’t respond to treatment, according to
some estimates. “For the first time ever, we now have an option that gives patients freedom,” said Dr.
Gregory Mattingly, a physician and president of the Midwest Research Group who was involved in Spravato’s
original clinical trials. His center in St. Louis, Missouri, has treated more than 6,000 patients with the drug,
and currently just over 100 people are taking it there. That is one of 3,000 outpatient treatment centers in
the U.S. that are certified to administer Spravato, according to J&J’s tally. Mattingly said patients can now
choose to take Spravato with or without an oral antidepressant, especially if those pills aren’t improving their
symptoms and are causing undesirable side effects, such as weight gain and sexual issues. J&J’s Martin said
the approval provides “an avenue for caregivers and their patients to really optimize, personalize the
treatment paradigm for each individual” and determine the best way for them to manage the disease. That
could potentially “open up the number of patients who could benefit” from Spravato, according to Martin.
Spravato is on its way to becoming a blockbuster product, with the drug bringing in $780 million in sales
during the first nine months of 2024 as doctors grow more comfortable using it, according to J&J’s third
quarter earnings. The company has even higher expectations for its growth, telling investors in December
that it expects sales will increase to between $1 billion and $5 billion annually. That is a boon to J&J as it
prepares for an upcoming patent expiration and new negotiated prices with Medicare to pressure sales of its
top-selling inflammatory treatment, Stelara. The approval is based on a phase four trial, which showed that
Spravato alone improved depressive symptoms beginning about 24 hours after treatment and lasting through
at least one month. The company has said that the safety profile was consistent with previous clinical data on
Spravato’s use in combination with oral antidepressants. Martin said that demonstrates “not only rapid
symptom relief, but also a durable symptom relief” when patients take Spravato by itself. - Intel Stock Keeps Climbing Amid Takeover Talk
Takeover rumblings that lifted shares on Intel last week were still rumbling today. Shares of Intel (INTC) were
up more than 2% Tuesday afternoon, outpacing broader markets’ gains and extending Friday gains that were
powered in part by deal-related rumors. Citi analysts last week said they see Broadcom (AVGO) as “the most
likely company” to be interested in buying Intel. Such a deal, the analysts said, might require Broadcom to
sell Intel’s struggling foundry business—which the U.S. government might not like, given a “stated interest in
Intel developing a merchant foundry.” Other named potential buyers have included Qualcomm (QCOM)—
and JPMorgan analysts last week said they see a possible wild-card buyer in Elon Musk. The analysts “could
understand the logic” if Musk were interested in Intel’s foundry arm, “considering the amount of chips that
his Tesla (TSLA), xAI, and SpaceX entities likely require.” Intel is valued in the tens of billions of dollars, but
the stock has lost more than half its value over the past 12 months, even after its recent bounce. The latest
gains indicate that investors may be buying into the possible that change, including M&A, is coming in the
wake of CEO Pat Gelsinger’s retirement late last year. - GM Stock Pops on Deutsche Bank Upgrade Ahead of Q4 Earnings
Shares of General Motors (GM) rose Tuesday after Deutsche Bank analysts upgraded the automaker’s stock
ahead of its fourth-quarter earnings report. The analysts upgraded the Chevrolet and Cadillac parent’s stock
to a “buy” rating from a “hold,” and lifted their price target to $60 from $56, a premium of about 18% from
GM’s closing level Friday. In the note previewing fourth-quarter earnings from U.S. automakers, the analysts
said they envision GM’s stock continuing to outperform rival Ford’s (F) in 2025. “For 4Q itself, we think GM
will report toward the high end of its guidance range, while Ford should be more in line,” they wrote. The
analysts noted recent decisions from GM, like halting development of its Cruise
robotaxis and restructuring its struggling operations in China, as positive strategic moves. They also said the
company’s “consistent track record of execution, and aggressive share buyback trajectory” gives them
confidence in the stock despite potentially harmful policies to the electric vehicle industry that could come
from the new Trump administration. Looking to the next fiscal year, the analysts expect GM to maintain its
projections of flat year-over-year earnings before interest and taxes (EBIT), while Ford could lower its
guidance for the same metric. GM is set to report Q4 results before the bell on Jan. 28, while Ford’s are
expected after markets close on Feb. 5. GM shares were up 5% Tuesday afternoon and have risen 50% over
the past 12 months.
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