S&P 500 Enters Correction Territory, Gold Hits Record

Nasdaq futures rose overnight and S&P 500 futures climbed after Senate Democrat Chuck Schumer signalled support to avert a US government shutdown, providing relief to jittery markets. Yesterday’s fall left the S&P 500 down 10% from its record, officially entering a correction. Gold hit a fresh record high amid as investors flocked to havens. UK GDP data showed a 0.1% decline in January, missing expectations of 0.1% growth.

Equities

The FTSE 100 ended the day flat, holding onto Wednesday’s gains, which were driven by optimism around Ukraine-Russia ceasefire talks. However, trade concerns kept sentiment muted, with investors weighing the potential impact of US tariffs on European goods. The FTSE 250 fell 1%, closing at its lowest level since April 2024, dragged down by weak corporate earnings.

NatWest shares dropped 2.7% after the UK government sold 89 million shares in the bank, reducing its stake below 30% and making it no longer the largest shareholder. C&C Group fell 19% after lowering its annual profit forecast, hitting its lowest level in more than a decade.

Trainline dropped 13.2% after missing annual revenue estimates, sending the stock to a 15-month low. Property firm Savills declined 8.6%, disappointing investors with a lack of a turnaround plan. Meanwhile, Vodafone rose 4.6% after two days of losses, and Volution climbed 12.7% to a three-month high following an upbeat full-year forecast.

On Wall Street, the S&P 500 fell 1.39%, confirming a correction with the index now more than 10% below its February record. The Dow dropped 1.3%, while the Nasdaq lost 1.96%, weighed down by losses in tech stocks.

Concerns over the US trade war overshadowed better-than-expected inflation data, with fears that tariffs could push up costs and slow the economy. The European Union responded to US steel and aluminium tariffs with a 50% tax on American whiskey, prompting President Trump to threaten 200% tariffs on European wines and spirits.

Intel surged 14.6% after appointing industry veteran Lip-Bu Tan as its new CEO. Adobe fell 13.9% after issuing a quarterly revenue forecast that met expectations but failed to impress investors. Dollar General rose 6.8% after posting strong quarterly results despite disappointing same-store sales estimates. The Dow Jones Transportation index fell 18.9% from its November peak, approaching bear market territory. Market breadth was weak, with decliners outnumbering advancers by more than 2-to-1 on both the NYSE and Nasdaq.

Forex & Commodities

The US dollar strengthened against most major currencies, with the dollar index rising 0.2% to 103.80, marking its second consecutive session of gains. The euro fell 0.28% to $1.0856 but remained close to its five-month high of $1.0947, supported by Germany’s ongoing fiscal discussions.

The Japanese yen rose 0.39% to 147.84 per dollar, helped by expectations of a Bank of Japan rate increase later in the year. The Canadian dollar lost 0.39% to C$1.4424, following the Bank of Canada’s 25-basis-point rate cut.

Gold reached an all-time high of $2,993.80 per ounce, approaching the $3,000 milestone as concerns over US trade tariffs and monetary easing drove demand for safe-haven assets. Spot gold later eased slightly to $2,984.71, while US gold futures rose 0.2% to $2,997.50. Precious metal traders are watching the Federal Reserve’s meeting next week, where the central bank is expected to hold rates steady in the 4.25%-4.50% range.

Oil prices rebounded, recovering some of Thursday’s losses. Brent crude rose 0.9% to $70.52 per barrel, while West Texas Intermediate gained 1.1% to $67.26. The gains followed signs that a ceasefire deal in Ukraine remains uncertain, potentially keeping Russian oil supplies restricted. Meanwhile, the International Energy Agency warned that oil supply could exceed demand by 600,000 barrels per day this year due to strong US production and weaker-than-expected consumption. China and Russia reaffirmed their support for Iran after the US imposed new sanctions, adding to geopolitical uncertainty in the energy market.