Global Markets Advance as Fed Policy Outlook and Geopolitical Developments Drive Sentiment

Index Update:  U.S. stock futures moved higher, with S&P 500 and Nasdaq 100 contracts gaining 0.4% and Dow futures rising nearly 100 points, supported by expectations of Federal Reserve rate cuts and upbeat developments in the tech sector. Nvidia climbed over 2% in pre-market trading after Meta announced plans to deploy millions of its chips in a new data center, while Amazon and Micron also advanced following increased positions by major asset managers. However, investor skepticism persists around heavy AI infrastructure spending and its ability to translate into sustained revenue growth, while automation trends continue to pressure software stocks. Meanwhile, the US 100 Tech Index edged down 0.13% to 24,848 in the latest session. Over the past four weeks, the index has declined 0.56%, though it remains up 12.05% on a year-over-year basis.

Market Movers:  On Tuesday, the top gainers were Polaryx Therapeutics, Inc. (+64.32%), followed by Atomera Incorporated (+46.17%). On the contrary, SMJ International Holdings Inc. (-61.42%), and JFB Construction Holdings. (-43.09%) declined the most the same day.

Commodities Update:  Oil prices rebounded on Wednesday, with WTI rising 2% to USD 63.7 per barrel and Brent climbing 2% to USD 69, driven by heightened geopolitical tensions following the abrupt end of Ukraine–Russia peace talks and planned Iranian-Russian naval drills. Investors are also awaiting U.S. inventory data, with expectations of a rise in crude stockpiles and declines in gasoline and distillates.  Gold recovered to around USD 4,930 per ounce after a two-day decline, supported by dip-buying and shifting expectations around Federal Reserve policy, as officials signaled rates may remain on hold while leaving room for potential cuts later this year. Silver also advanced above USD 75 per ounce on similar rate-cut expectations, although gains were tempered by a stronger dollar, easing geopolitical tensions, and thinner trading volumes due to the Lunar New Year holiday.

Macro Updates:  U.S. Mortgage Applications Rebound as Rates Edge Lower

U.S. mortgage applications rose 2.8% in the second week of February, marking the first increase in four weeks and partially reversing recent declines. The uptick followed a slight drop in benchmark mortgage rates, with the average 30-year fixed rate easing to 6.17%, the lowest level in four weeks, amid softer Treasury yields and growing expectations of Federal Reserve rate cuts.

Refinancing activity, which is more sensitive to interest rate movements, surged around 7%, driving the overall increase in applications. However, home purchase applications declined nearly 3%, reflecting continued supply constraints in the housing market and cautious buyer sentiment.

Dollar Firms as Investors Await Fed Minutes and Key Economic Data

The U.S. dollar index climbed above 97 on Wednesday, rebounding after recent volatility as investors looked ahead to the Federal Reserve’s meeting minutes for clearer guidance on the interest rate outlook. Markets are also closely watching the upcoming PCE Price Index release and GDP data, which is expected to confirm continued economic expansion.

Despite recent benign inflation readings, stronger labor market data has kept the policy path uncertain, with Fed officials signaling that rates may remain steady until inflation sustainably moves toward the 2% target. Meanwhile, U.S.–Iran nuclear talks progressed with agreement on guiding principles, though a broader deal appears unlikely in the near term.

Bonds Commentary:  The 10-year U.S. Treasury yield held near 4.06% after recently hitting a two-month low, as investors awaited the Federal Reserve’s meeting minutes for clearer signals on the interest rate outlook. Fed officials indicated rates may remain on hold until inflation moves closer to the 2% target, though potential cuts later this year remain possible if price pressures ease.

The policy path remains uncertain following mixed economic data, with markets now focused on upcoming PCE inflation and Q4 GDP figures. Meanwhile, U.S.–Iran nuclear discussions progressed modestly, easing tensions slightly, though a broader agreement appears unlikely in the near term.

Futures Update:  U.S. stock index futures moved higher on Wednesday morning as investors awaited the release of the Federal Reserve’s latest policy meeting minutes and additional quarterly earnings reports. Dow Jones Futures rose 0.5%, S&P 500 Futures gained 0.6%, and Nasdaq 100 Futures advanced 0.7%, reflecting a positive start ahead of key updates.

Following early pressure during the session, stocks managed to recover and ended the day on a positive note on Tuesday. The major indices climbed back from their lows of the trading day. The S&P 500 gained 7.03 points, or 0.10%, closing at 6,843.21. From a technical perspective, the index found support at its immediate support levels and closed in positive territory, suggesting the potential for further upward movement in today's session. However, the 14-day Relative Strength Index (RSI) remains below the midpoint, indicating lingering bearish sentiment. Key support is observed around 6,730, which could act as a rebound level, while resistance is near 6,920.