Bitcoin Surges 10% as Trump Proposes Crypto Reserve

Bitcoin rose 10% and ether jumped 13% after President Trump announced plans for a US digital asset reserve, though details remain unclear ahead of Friday’s White House Crypto Summit. Meanwhile, uncertainty surrounds Trump's proposed 25% tariffs on Mexico and Canada, set to take effect Tuesday, with potential delays or modifications still possible. US stocks ended higher on Friday, with the Dow up 1.4%, while weaker economic data has led markets to price in 73 basis points of Fed rate cuts by January 2026.

Equities

The FTSE 100 rose 0.6% on Friday, closing at a record high, supported by strong corporate earnings and a weaker pound.

British Airways parent company IAG climbed 4% to a five-year high after reporting a 27% rise in annual operating profit, exceeding expectations, and announcing a share buyback programme. Engineering firm IMI led the index with a 6.2% gain after raising its dividend by 10% and unveiling a new share buyback plan.

Weir Group shares increased by 6.3% following a nearly 10% rise in adjusted annual profit and news of its £657 million acquisition of mining software provider Micromine.

The FTSE 250 fell 0.4%, dragged down by Morgan Advanced Materials, which slumped 16.2% after forecasting a decline in organic revenue for the year.

Wall Street’s main indices rebounded on Friday after a volatile session. The S&P 500 gained 1.6%, the Nasdaq rose 1.63%, and the Dow added 1.4%. Nvidia and Tesla both rose nearly 4%, helping lift the S&P 500. Dell fell 4.7% after forecasting a drop in its adjusted gross margin for fiscal 2026, while HP dropped 6.8% following a weaker-than-expected profit outlook.

US markets initially dipped after tensions escalated between President Donald Trump and Ukrainian President Volodymyr Zelenskiy during a White House meeting, raising concerns over US support for Ukraine.

The January PCE price index showed inflation rising in line with expectations, but consumer spending declined by 0.2%, complicating the Federal Reserve’s outlook on interest rates.

Forex & Commodities

The euro rose 0.4% to $1.0417 on Monday, recovering from a two-and-a-half-week low, as European leaders pushed for a Ukraine peace deal. Sterling gained 0.2% to $1.2604, while the US dollar index fell 0.1% to 107.21. The Canadian dollar and Mexican peso each strengthened by 0.2% following comments from US Commerce Secretary Howard Lutnick suggesting the planned 25% tariffs on Canada and Mexico might not be fully implemented. The Japanese yen edged up 0.1% to 150.46 per dollar.

Bitcoin surged 10% to trade above $93,000 after President Donald Trump named it among the assets to be included in a new US cryptocurrency reserve. The announcement reversed Friday’s losses, when Bitcoin had fallen below $78,300 for the first time since November. Ether, XRP, solana, and cardano also rallied on the news.

Gold climbed 0.3% to $2,866.19 per ounce, supported by a weaker dollar and uncertainty surrounding Ukraine. US gold futures rose 1% to $2,875.80. Platinum slipped 0.3% to $944.70, while palladium gained 0.7% to $925.25. Analysts warned that Trump’s proposed tariffs on auto imports could reduce demand for platinum and palladium due to their use in vehicle production.

Oil prices edged higher, with Brent crude rising 0.3% to $73.00 a barrel and US West Texas Intermediate crude up 0.3% to $69.95. Stronger-than-expected Chinese manufacturing data supported demand expectations, though concerns over US tariffs and the uncertain outlook for a Ukraine peace deal kept gains in check.