US strikes on Iran increased geopolitical tensions and pushed oil prices higher. Markets turned more cautious, supporting gold and pressuring equities.
US stock markets declined during the week. The Dow fell 1.31%, the S&P 500 lost 0.44%, and the Nasdaq dropped to 22,668. Investors remained cautious amid concerns about the potential disruptive effects of artificial intelligence, ongoing trade and tariff uncertainty, and broader geopolitical risks. Although NVIDIA reported strong earnings, it was not enough to shift the overall cautious tone in markets.
Inflation data added to uncertainty. January producer prices rose 0.5% month over month and 2.9% year over year, mainly driven by services. At the same time, some indicators pointed to softer economic momentum. Factory orders declined 0.7% in December after a strong gain in the previous month. Consumer confidence edged up to 91.2 but remained well below its late-2024 peak. Initial jobless claims rose slightly to 212,000, while continuing claims fell to 1.833 million. Bond prices increased as investors moved toward safer assets, pushing the 10-year Treasury yield below 4%.
European markets showed relative strength. The STOXX Europe 600 gained 0.52%, supported by corporate earnings and investor diversification flows. The UK’s FTSE 100 rose 2.06%, Italy’s FTSE MIB advanced 1.59%, and France’s CAC 40 increased 0.77%.
