Bitcoin Drops 3% as Trump Launches Digital Token

Bitcoin fell 3% to $101,800 after Donald Trump announced a new digital token, which initially surged but retreated following the launch of a competing token by Melania Trump. Investors remain cautious as the dollar eased in Asian trading ahead of Trump’s second-term inauguration, where he is expected to sign nearly 100 executive orders. US markets are closed for Martin Luther King Day, leaving bond and stock futures and foreign exchange markets in focus.

Equities

The FTSE 100 climbed 1.4% on Friday, hitting a record high and marking its fourth consecutive weekly gain. The index was buoyed by a weaker pound, which followed unexpectedly soft UK retail sales data. This raised expectations of an interest rate cut by the Bank of England next month. The FTSE 250 added 0.3%, achieving its best weekly performance since October 2023.

Smiths Group rose 5.5% after US activist investor Engine Capital, which holds a 2% stake, pushed for the company to consider selling itself or parts of its business. Oil giant Shell advanced 1.2%, while Unilever gained 1.6%. Meanwhile, Glencore added 2.7%, and Rio Tinto’s London-listed shares increased 2.2% following reports of prior merger discussions between the two copper producers, though these talks are no longer active.

Across the Atlantic, the S&P 500 rose 1%, the Dow Jones Industrial Average gained 0.78%, and the Nasdaq Composite climbed 1.51%. All three major US indices posted their largest weekly gains since late 2024. Nvidia’s shares jumped 3.1% and Broadcom gained 3.5% after Barclays raised price targets for both companies.

Intel surged 9.25% on speculation of a potential takeover, while Qorvo soared 14.43% after activist investor Starboard Value disclosed a 7.7% stake in the chipmaker. The semiconductor index rose 2.84%, boosted by these gains.

Meta edged up 0.24% following a muted reaction to a Supreme Court decision affecting TikTok, while Snap fell 3.21%.

US Treasury yields showed mixed movements, with the benchmark 10-year note yield rising slightly to 4.619%, but staying below the 14-month high it reached earlier in the week. Market participants are increasingly expecting the Federal Reserve to begin cutting rates as inflation shows signs of easing, with a potential 25 basis-point cut anticipated by June. Nine of the 11 S&P 500 sectors rose, reflecting broad market strength.

 Forex & Commodities

The US dollar softened as traders awaited Donald Trump's inauguration and potential policy announcements. The dollar index slipped 0.16% to 109.16, slightly off its recent 26-month high of 110.17, with the euro rising 0.26% to $1.0298. The yen hovered near a one-month high at 155.98, as markets anticipated a potential Bank of Japan rate hike at its upcoming meeting, which could mark a historic shift in its monetary policy stance. Sterling edged up 0.27% to $1.2201.

Gold gained 0.3%, trading at $2,711.29 per ounce, as a weaker dollar bolstered its appeal to foreign buyers. The commodity had dipped earlier but recovered as investors focussed on the potential inflationary impact of Trump's trade tariffs. US gold futures rose 0.1% to $2,752.40. Goldman Sachs maintained its long-term gold price forecast at $3,000 per ounce by mid-2026, while increasing its central bank demand projections.

Oil prices fell, with Brent crude futures down 0.35% at $80.51 per barrel and WTI April contracts dropping 21 cents to $77.18. Speculation about Trump relaxing Russian energy sanctions to broker a peace deal in the Ukraine conflict weighed on the market. Last week’s US sanctions on Russian oil producers and tankers had supported a 1% weekly price gain but left supply chains strained, pushing up tanker rates. Meanwhile, easing Middle East tensions following a ceasefire between Israel and Hamas also limited upward pressure on prices.