ORLANDO, Florida, Feb 24 - U.S. and global equity markets bounced back on Tuesday after traders shrugged off some of the recent anxieties about generative AI, digesting too a last-minute adjustment to U.S. tariff policy and preparing for a major technology earnings report.
The relief rally was broad but uneven, with strength concentrated in parts of the tech complex and in several Asian markets that reached new highs. At the same time, fixed income markets showed pressure at the short end of the yield curve and commodities slipped.
Quick overview
Stocks rose as investors took a softer view of recent AI-driven disruption, while President Donald Trump scaled back a proposed tariff increase to a temporary 10% global rate. Market attention also turned to Nvidia, whose quarterly results were due after the U.S. close. Below, I examine the market moves, the drivers behind them, and key data and events to watch next.
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Today’s key market moves
- Stocks: Taiwan and South Korea rose about 2.5% to fresh highs. Brazil’s Bovespa also moved to a new peak with 200,000 points in sight. Wall Street staged a strong rebound and the S&P 500’s technical support at its 100-day moving average held.
- Sectors and shares: Nine S&P 500 sectors finished higher; tech, consumer discretionary, industrials and utilities were up by more than 1%. Healthcare and energy declined. The Philadelphia semiconductor index closed at a record high. Individual movers included AMD up 9%, Intel up 6%, Salesforce up 4% and IBM up 2.7%.
- FX: USD/CNY traded at its lowest in almost a year. The Japanese yen was the biggest decliner among G10 currencies following comments by Prime Minister Takaichi. Bitcoin dipped below $63,000 before recovering.
- Bonds: Treasuries were weaker at the short end after a soft two-year auction. The 2s/10s curve flattened for the 10th consecutive day, a streak not seen in over a decade. Spain’s syndicated 30-year bond sale drew record demand.
- Commodities and metals: Oil fell about 1% amid hopes of a U.S.-Iran deal. Gold declined roughly 2%.
Key talking points
1) A pause in the panic over AI
Some of the fear that had pushed parts of the market lower eased after Anthropic unveiled new plug-ins aimed at sectors such as investment banking and human resources. Stocks that had been hit by recent AI-related selling recouped ground; Thomson Reuters surged 11.5%, marking its largest one-day gain since 2008. That said, pockets of the market that endured the sharpest falls showed only modest rebounds - the S&P 500 software and services index, which lost more than 20% in under four weeks, climbed only about 1% on the day. That limited recovery suggests investors are still cautious about re-entering positions they sold during the rout.
2) The tariff saga - a confusing timeline
The administration’s tariff moves unfolded rapidly: a recent Supreme Court decision against most of the president’s tariffs prompted him to sign an order instituting a temporary 10% global tariff; he then said on Saturday he intended to raise the rate to 15%; by Monday, the level was set back at 10%, though the president indicated he may still seek 15% in future. The back-and-forth has left policymakers in Europe, Japan, Britain and elsewhere calling for clarity and hoping that trade deals agreed last year will be honored. Market participants are looking to the president’s State of the Union address to Congress later on Tuesday for possible clarification of intentions.
3) Strength in the yuan
China’s onshore yuan staged a notable advance, posting its biggest one-day rise against the dollar this year and marking an eighth consecutive session of gains - its longest winning run since April 2024. The stretch of appreciation was in part driven by markets reopening after the Lunar New Year holiday. Observers note that Beijing is likely intervening to cap the currency’s upside, recycling record trade surplus inflows into foreign assets, including U.S. Treasuries.
What could move markets next
- Australia CPI (January)
- Reserve Bank of Australia Governor Michele Bullock speaks
- Japan service sector PPI inflation (January)
- Thailand interest rate decision
- European Central Bank board members speak
- Euro zone inflation (January, final)
- Germany GfK consumer sentiment (March)
- Germany GDP (Q4, detailed)
- Nvidia reports Q4 earnings after the U.S. close
- U.S. Treasury sells $70 billion of five-year notes at auction
- Federal Reserve officials scheduled to speak include Richmond Fed President Thomas Barkin, Kansas City Fed President Jeffrey Schmid and St. Louis Fed President Alberto Musalem
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