U.S. stock indexes opened by following firm gains in Europe on Wednesday but lost some of their early traction as the trading day unfolded. Markets remained sensitive to central bank headlines and geopolitical developments, while commodities such as crude oil and gold strengthened on supply and safe-haven concerns.
Reports that Christine Lagarde could exit her role as president of the European Central Bank earlier than previously anticipated placed the spotlight on leadership at the ECB. At the same time, the minutes from the Federal Reserve’s most recent policy meeting underscored divisions among officials about the central bank’s next steps even as there was broad agreement to hold interest rates steady for now.
Traders also reacted to rising geopolitical tensions that helped revive demand for oil and bullion. Crude prices surged on worries about potential supply disruptions, while gold attracted buyers seeking refuge amid uncertainty.
Market movers and sector performance
- Stocks: Madison Square Garden Sports jumped to record highs on news suggesting a possible spin-off related to the Knicks. Garmin and MGM Resorts were among the day’s leading individual performers. The so-called "magnificent seven" technology-related stocks all posted gains, with Amazon.com leading that group.
- Sectors outperformed: Energy, consumer discretionary, technology and transportation sectors all outpaced the broader market during the session.
- Foreign exchange: The euro weakened following the report about Lagarde’s prospective departure from the ECB, while the U.S. dollar strengthened against a basket of global currencies.
- Bonds: U.S. Treasury yields moved higher after data signaled robust economic activity, reinforcing expectations that the Fed will keep rates on hold for the time being.
- Commodities and metals: Crude oil climbed amid supply concerns driven by simmering geopolitical friction; gold rose on renewed safe-haven demand.
Key reads highlighted by market participants
- Meta Platforms CEO Mark Zuckerberg was questioned over the potential effects of Instagram on the mental health of young users.
- Satellite imagery reportedly shows Iran repairing and fortifying sensitive military sites amid escalating tensions with the United States.
- Investment in artificial intelligence continues to spur U.S. business spending on equipment, even as the housing market remains weak.
- Germany plans to pursue a "strategic partnership" with China in response to U.S. tariffs.
- The Vatican announced it will not participate in U.S. President Donald Trump’s "Board of Peace," saying crisis management should be handled by the United Nations.
Key thematic talking points from the session
- Christine Lagarde intends to step down as ECB president - The Financial Times reported that Lagarde would leave her role before next year’s French election to allow the French president to have a say in choosing her successor. That development sparked speculation about potential candidates to replace her and added pressure to euro-area markets.
- U.S.-mediated peace negotiations between Russia and Ukraine ended suddenly - After two days of talks, negotiators halted discussions. Ukrainian President Volodymyr Zelenskiy described the sessions as "difficult" and accused Russia of deliberately stalling progress toward a settlement to end the conflict.
- U.S. business spending closed 2025 on a strong note - New orders for U.S.-manufactured core capital goods, which exclude aircraft and defense items and are regarded as an indicator of corporate capital expenditure plans, rose more than expected in December. Shipments of these goods also surged, indicating solid business spending and supporting growth in the fourth quarter.
- Federal Reserve minutes show policymakers divided on the next move - Minutes from the Fed’s latest monetary policy meeting revealed near-unanimous agreement to hold interest rates steady, but officials remained split over the appropriate direction after that point.
What could move markets next
- U.S. international trade balance for December
- U.S. jobless claims for the most recent week
- U.S. pending home sales for January
- Euro zone consumer confidence for February
- Euro zone construction output for December
- Canada trade balance for December
- Comments from a range of Federal Reserve officials, including Atlanta Fed President Raphael Bostic, Fed Vice Chair for Supervision Michelle Bowman, Minneapolis Fed President Neel Kashkari, and Chicago Fed President Austan Goolsbee
Overall, markets reacted to a combination of central bank-related headlines and geopolitical developments that shifted sentiment across equities, fixed income and commodity markets. Investors continue to weigh leadership changes at major central banks and evolving international tensions as they assess near-term risk and capital allocation decisions.