Tech Rally Fuels S&P 500 Record High

Equities

• The European stock market is set to open on a positive note, taking inspiration from Friday's rally in U.S. technology stocks, which led the S&P 500 to an all-time high. This optimism is partly fuelled by growing interest in artificial intelligence and its impact on tech shares.
• The positive trend in the U.S. is mirrored in the UK, with the FTSE 100 benefiting from a weak pound and rebounding after a significant sell-off earlier in the week. The FTSE 250, closely tied to the UK economy, also shows modest gains.
• Major U.S. firms such as Tesla, Intel, Netflix, IBM, Lockheed Martin, and Seagate are hastening their earnings disclosures. In the UK, Crest Nicholson's market updates met expectations, and JD Wetherspoon is expected to announce higher comparable sales.

Forex

• In the forex market, the dollar's trajectory is uncertain. It remained mixed in Asian trading but could weaken if expectations for a Fed rate cut continue to diminish. This shift is influenced by differing views among FOMC members on the timing of rate adjustments.
• The British pound experienced a decline following weak UK retail sales data, impacting currency markets. This drop provided a boost to FTSE 100 companies with dollar earnings, reflecting the interconnectedness of forex and equity markets.

Commodities

• Oil prices are experiencing mixed trends, grappling with global demand concerns and the impact of geopolitical tensions, particularly in the Red Sea region. These factors contribute to a volatile oil market, with prices struggling to find a stable trajectory.
• In contrast, gold prices have edged lower, influenced by the changing expectations around the Federal Reserve's interest rate decisions. This is indicative of gold's sensitivity to monetary policy shifts and broader economic indicators.

Elsewhere

• In US politics, Ron DeSantis withdrew from the presidential race, endorsing Donald Trump for the 2024 Republican nomination, impacting Nikki Haley's campaign ahead of the New Hampshire primary.
• A YouGov poll for The Times indicates that a majority of UK voters prefer increased spending on public services over tax cuts, despite Chancellor Jeremy Hunt's proposed tax reductions in the upcoming Spring Budget.