S&P 500 Steadies as Fed Signals Rate-cut Path

The S&P 500 hovered near record highs as investors focused on Federal Reserve commentary suggesting inflation could allow several rate cuts this year. Asian equities edged higher with Japan leading on optimism over US-linked technology investment, while European stock futures pointed to small gains at the open. In currencies, the New Zealand dollar weakened after a dovish hold from the central bank, and sterling softened as expectations for Bank of England rate cuts increased.

Equities

The FTSE 100 closed at a fresh record high on Tuesday, ending the session up 0.8% at 10,556 after spending most of the day in positive territory. The move higher followed the release of UK labour market data showing a rise in unemployment and softer wage growth, which reinforced expectations of a Bank of England rate cut as early as March. The FTSE 250 also finished the day higher, gaining 0.8% and trading at its strongest level in four years by the close.

Within the UK market, technology stocks led gains late on Tuesday, continuing to stabilise after last week’s sharp swings linked to artificial intelligence. RELX and Experian both closed more than 2% higher after renewed buying interest, while InterContinental Hotels Group ended the session up 1.1% after reporting fourth-quarter revenue per available room ahead of market expectations. By contrast, mining stocks weighed on the index. Antofagasta shares fell 3.4% at the close despite the company reporting a sharp rise in annual core profit, with weaker copper prices overshadowing the earnings update. Defence stocks also finished lower, reflecting reduced demand expectations as diplomatic tensions eased. Plus500 closed down 5.2% after the trading platform said several senior executives intended to sell shares.

In the United States, equities finished with modest gains on Tuesday after a volatile session. The S&P 500 closed 0.1% higher, recovering from earlier losses as technology shares rebounded late in the day. Nvidia and Apple ended higher, helping lift the broader technology sector, while Microsoft and Oracle finished lower. Software stocks continued to struggle, with Intuit and Cadence Design Systems both closing more than 5% lower.

The Dow Jones Industrial Average edged higher into the close after earlier declines, supported by gains in financial stocks. Goldman Sachs and JPMorgan Chase both ended the session higher, helping offset weakness elsewhere. On the corporate side, Norwegian Cruise Line closed 12.1% higher after reports that activist investor Elliott had built a stake of more than 10% in the company. Fiserv finished the day up 6.9% following reports that Jana Partners had taken a position in the payments group. Masimo surged 34.2% at the close after agreeing to be acquired by Danaher for $9.9 billion, while Danaher shares finished 2.9% lower.

Forex & Commodities

The US dollar traded firmer, with the dollar index holding near 97.23 as investors focused on geopolitical developments and awaited further guidance from the Federal Reserve. The move higher came as markets monitored progress in US–Iran nuclear discussions in Geneva and followed renewed caution around global risk appetite. The euro was little changed at 1.184, while the Japanese yen weakened to around 153.6 per dollar after President Donald Trump announced the first phase of large-scale Japanese investment projects in the United States. Sterling edged lower to roughly 1.355 during Asian trading, extending Tuesday’s decline as expectations grew that softer UK inflation and rising unemployment could open the door to interest rate cuts by the Bank of England.

The New Zealand dollar fell sharply to about 0.5996 after the Reserve Bank of New Zealand left its policy rate unchanged and signalled that monetary settings would need to remain accommodative to support the recovery. The Australian dollar also moved lower, trading near 0.7065 against the US dollar. In Japan, official data showed exports rose for a fifth consecutive month, while the International Monetary Fund urged the Bank of Japan to continue tightening policy gradually.

Gold prices rebounded early this morning after sliding late on Tuesday, with spot gold trading near 4,935 dollars an ounce in thin liquidity. The recovery followed a sell-off earlier in the week linked to easing geopolitical concerns, although traders remained cautious ahead of the release of Federal Reserve meeting minutes later today. Silver, platinum and palladium also moved higher after sharp declines in the previous session.

Oil prices steadied during Asian hours after closing lower on Tuesday. Brent crude traded near 67.57 dollars a barrel and US crude near 62.45, as traders weighed tentative diplomatic progress between Washington and Tehran against ongoing supply risks. Attention later today turns to US inventory data from the American Petroleum Institute, with official government figures due on Thursday.