Investors Seek Shelter in Metals as Stocks Show Signs of Fatigue

Stocks finished a turbulent week on a quiet note, with major indexes diverging. The Dow pulled back while the Nasdaq and S&P 500 edged higher, supported by resilient tech megacaps. Despite a late-week bounce, all three benchmarks notched a second straight weekly decline, marking the S&P 500’s first back-to-back weekly losses since June. Risk sentiment remains cautious ahead of next week’s Fed meeting and big-tech earnings. Meanwhile, safe-haven assets surged, with gold and silver hitting record highs and Treasury yields drifting lower.

Key Headlines & Market Movers:

• Flight to Safety - Gold and Silver Set Records: Investors flocked to precious metals amid geopolitical uncertainty and inflation concerns. Gold futures approached $5,000/oz, and silver broke above $100/oz, both setting new records. The rally underscores elevated demand for safety, despite resilient equity performance. Dollar weakness and potential geopolitical flare-ups, including tensions in the Middle East and U.S.-Europe trade noise, added fuel to the move.

Tech Megacaps Lead Amid Chip Divergence: While Intel slumped 17% after a disappointing outlook, peers Nvidia (+1.5%), Microsoft (+4%), and Amazon (+2%) supported index stability. Nvidia rose on optimism around AI chip shipments to China, while investors continue rotating into names tied to AI and cloud services ahead of earnings. This divergence within semis suggests growing selectivity in tech leadership.

• Policy Cools Market Volatility for Now: President Trump’s decision to walk back tariff threats on Europe helped ease midweek tensions. The EU agreed to delay retaliatory tariffs, calming markets after Tuesday’s sharp selloff. However, lingering uncertainty surrounding trade, elections, and Fed policy remains a key market driver as investor attention turns to central bank and earnings updates next week.

Corporate Moves and M&A in Focus: Capital One's 7% drop followed weak earnings and its $5.15B acquisition of Brex, raising questions about near-term margin impact. Oracle dipped after being named TikTok’s U.S. cloud partner, a politically sensitive development. In contrast, Ericsson jumped 10% on a beat-and-buyback announcement, highlighting selective optimism where execution and capital returns align.

S&P 500 Sector Performance

Looking Ahead

Next week will bring a critical read on Fed policy, with markets expecting rates to hold steady. All eyes will also be on earnings from major tech firms, which could reset investor expectations amid high valuations and narrow market leadership. With safe-haven assets signaling caution and retail inflows continuing during dips, the setup remains constructive, but fragile, heading into February.

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