Weekly Market Recap & What's Ahead - 10 to 14 February 2025

Weekly Market Recap & What's Ahead
10 to 14 February 2025

Key Takeaways

• Equities: Markets volatile; S&P 500 -0.95% (Feb 7), +1% (Feb 13); Alibaba +20% on AI news
• Volatility: VIX peaked at 16.54, then eased to 15.10 as inflation fears moderated
• Digital Assets: Bitcoin fell below $94K, rebounded to $97K; XRP +4.2% on ETF speculation
• Fixed Income: 10-year U.S. yield hit 4.65%, then fell to 4.50%; Bund yields followed
• Commodities: Gold hit $2,942, oil up on Iran sanctions, later dipped on Russia talks
• Currencies: DXY hit 108.2, then weakened; EUR/USD broke 1.044, USD/JPY reversed from 154.79

Headlines & Macro News (10 to 14 February 2025)

Markets faced heightened volatility as Trump’s 25% tariffs on steel and aluminum reignited global trade tensions (Feb 10 Daily Quick Take). China retaliated with new tariffs on U.S. goods, while EU officials warned of countermeasures (Feb 11 Daily Quick Take). Investors struggled to assess whether these moves were bargaining tactics or signs of a structural shift in trade policy.

Inflation concerns intensified as U.S. CPI rose 3% YoY, exceeding expectations and pushing back Fed rate-cut bets (Feb 13 Daily Quick Take). Fed Chair Powell, in his congressional testimony, signaled no urgency to cut rates, reinforcing the higher-for-longer interest rate narrative (Feb 12 Daily Quick Take). However, softer PPI data later in the week (Feb 14 Daily Quick Take) helped ease fears of an accelerating inflation trend.

Earnings season continued with major corporate results influencing market sentiment. While Amazon fell 4% on weak guidance (Feb 10 Daily Quick Take), Palantir surged 34% post-earnings. In Europe, Siemens jumped 7.3% on strong results (Feb 14 Daily Quick Take), and Heineken soared 14% on solid earnings (Feb 13 Daily Quick Take). Meanwhile, Chinese AI and tech stocks rallied, led by Alibaba (+8.5%) following an AI partnership announcement with Apple (Feb 13 Daily Quick Take).

Trump’s tariff uncertainty dominated market sentiment, with investors reacting to shifting trade policy announcements throughout the week. By the end of the week, Trump delayed tariff implementation (Feb 14 Daily Quick Take), calming markets and helping equities rebound.

Equities

U.S. markets saw significant volatility throughout the week, driven by Trump’s trade war escalation, inflation fears, and major earnings releases.

• Friday, February 7 (Feb 10 Daily Quick Take): U.S. stocks fell sharply as Trump’s 25% tariffs on steel and aluminum raised concerns of a global trade war. The S&P 500 dropped 0.95%, the Nasdaq fell 1.3%, and the Dow lost 443 points. Amazon tumbled 4% after weak revenue guidance, while Palantir soared 34% post-earnings.
• Monday, February 10 (Feb 11 Daily Quick Take): Markets rebounded, despite ongoing tariff fears. The S&P 500 gained 0.67%, Nasdaq 100 rose 1.2%, and Dow added 0.38%. Tech and steel stocks led the recovery, with Nvidia (+2.9%), Broadcom (+4.5%), and Super Micro (+17.6%) posting strong gains. Cleveland-Cliffs jumped 17.9% and Nucor gained 5.6%, benefiting from steel tariffs.
• Tuesday, February 11 (Feb 12 Daily Quick Take): Stocks ended mixed as Fed Chair Powell confirmed the Fed is in no rush to cut rates, while Trump’s tariffs weighed on trade-sensitive sectors. The S&P 500 was flat (+0.03%), the Dow gained 0.3%, and the Nasdaq 100 declined 0.29%. Tesla fell 6.3% on weak European sales, while Apple (+2.2%) and Coca-Cola (+4.7%) outperformed on AI and earnings news.
• Wednesday, February 12 (Feb 13 Daily Quick Take): Inflation concerns resurfaced as U.S. CPI came in hotter than expected (3% YoY), pushing back Fed rate-cut expectations. The S&P 500 fell 0.27%, the Dow lost 0.5% (-225 points), while the Nasdaq 100 eked out a 0.1% gain. Energy stocks were the weakest performers, while Meta extended its AI-driven rally and Alibaba surged 8.5% after announcing a collaboration with Apple.
• Thursday, February 13 (Feb 14 Daily Quick Take):  Stocks rallied as Trump delayed his tariffs and U.S. PPI inflation data came in softer than expected, easing rate-hike fears. The S&P 500 gained 1%, and the Nasdaq 100 rose 1.4%. Tesla (+3.2%) and Nvidia (+3.4%) led the rebound. In Europe, Siemens soared 7.3% after strong earnings, and Heineken jumped 14% after reporting robust quarterly results.

Volatility

Market volatility spiked early in the week as Trump’s tariff announcement and inflation fears rattled investors, but gradually eased as tariff implementation was delayed and markets adjusted to economic data.

The VIX surged to 16.54 (+6.71%) on February 7 (Feb 10 Daily Quick Take), as trade war fears and a hotter-than-expected CPI print increased uncertainty. However, volatility eased as the week progressed, with the VIX falling to 15.10 by February 13 (Feb 14 Daily Quick Take), as Trump postponed tariffs and U.S. PPI data showed moderating inflation.

Short-term volatility indicators fluctuated but remained controlled. VIX1D spiked 24.6% on February 11, signaling short-term hedging ahead of the CPI release, but later declined as market fears receded. VIX futures remained stable, suggesting traders were not expecting prolonged volatility spikes.

Overall, put skew steepened, indicating some hedging activity, but realized S&P 500 volatility dropped to 10%, reinforcing that market anxiety had subsided by the week’s end.

Digital Assets

Cryptocurrencies experienced high volatility throughout the week, driven by macroeconomic uncertainty, shifting risk sentiment, and regulatory developments.

Bitcoin started the week under pressure, briefly dropping below $94,000 on February 10 (Feb 11 Daily Quick Take) after Trump’s tariff announcement weighed on global risk assets. However, BTC rebounded to $97,000 (+0.55%) by February 13 (Feb 14 Daily Quick Take), as markets stabilized following softer U.S. PPI data and a delay in tariffs. Ethereum (+0.08%) and Solana (+1.02%) saw minor gains, while XRP surged 4.2% as the SEC acknowledged Grayscale’s XRP ETF filing, fueling institutional adoption speculation.

Crypto-related equities were mixed. Coinbase (+1.52%) and MicroStrategy (+2.16%) gained as Bitcoin recovered, but mining stocks like Marathon Digital (-0.18%) struggled amid concerns over higher energy costs due to trade policies. Meanwhile, Goldman Sachs significantly increased its crypto ETF holdings, reinforcing institutional confidence despite short-term price swings.

Market sentiment remained cautious but not bearish, with the Crypto Fear & Greed Index dropping to 43, signaling persistent uncertainty amid inflation concerns and potential regulatory shifts.

Fixed Income

Bond markets experienced significant yield swings throughout the week as investors reacted to trade policy uncertainty, inflation data, and shifting rate-cut expectations.

U.S. Treasury yields rose early in the week, with the 10-year yield climbing to 4.65% on February 12 (Feb 13 Daily Quick Take) after hotter-than-expected U.S. CPI data (3% YoY) pushed back expectations for Fed rate cuts. However, as the week progressed, softer U.S. PPI data and Trump’s tariff delay helped ease concerns, leading the 10-year yield to retreat to 4.50% by February 13 (Feb 14 Daily Quick Take).

European bonds mirrored U.S. movements, with the German 10-year Bund yield peaking midweek before falling to 2.42% by February 13. Meanwhile, Japanese government bond yields continued to steepen, with the 10-year JGB reaching 1.35%, the highest level since 2011, as investors assessed BoJ policy risks.

Credit markets saw widening spreads early in the week, particularly in rate-sensitive sectors, but stabilized as bond yields retreated by the end of the week.

Commodities

Gold surged to a record high of $2,942 on Feb 12 (Feb 13 Daily Quick Take), driven by safe-haven demand amid trade war fears and persistent inflation concerns. Prices retreated slightly but held firm near historic levels as central banks continued accumulating gold.

Oil markets saw midweek gains after new U.S. sanctions on Iranian crude exports tightened supply, with WTI rising to $71.40 and Brent to $75.05 (Feb 10 Daily Quick Take). However, prices pulled back later in the week as Trump hinted at potential de-escalation with Russia.

Industrial metals remained volatile, with copper climbing to $4.85/lb on supply concerns from Chile and strong industrial demand (Feb 14 Daily Quick Take), while iron ore rose 0.9% to $107.25 amid renewed trade uncertainty.

Currencies

The U.S. dollar strengthened early in the week, with DXY rising to 108.2 (Feb 10 Daily Quick Take) as hotter-than-expected CPI data and strong U.S. jobs figures pushed back rate-cut expectations. However, as Treasury yields retreated, the dollar gave up gains, with EUR/USD breaking above 1.044 by Feb 13 (Feb 14 Daily Quick Take).

USD/JPY surged to 154.79 on Feb 12 before pulling back to 152.50 (Feb 14 Daily Quick Take), tracking fluctuations in U.S. bond yields and concerns over Trump’s tariff plans affecting Japan.

Commodity-linked currencies saw mixed movements, with AUD/USD climbing past 0.6300 (Feb 13 Daily Quick Take), benefiting from rising copper prices and expectations of additional stimulus in China. Meanwhile, CAD rose to 1.43 against USD as strong labor data reduced immediate rate-cut expectations (Feb 10 Daily Quick Take).

Looking Ahead (17 to 21 February 2025)

• Earnings in Focus: Walmart (Feb 20) and Booking Holdings (Feb 20) report amid inflation and trade concerns. Alibaba (Feb 22) will provide insights into AI growth and trade policy impacts. Live Nation (Feb 20) may highlight weaker fan attendance.
• Tech & Autos: Arista Networks (Feb 18) expected to benefit from AI cloud expansion. Carvana (Feb 19) forecasts 42% sales growth, while Rivian (Feb 22) could report profitability progress despite U.S.-Mexico-Canada trade risks.
• European Markets: Renault (Feb 20) expected to report strong hybrid vehicle sales. Airbus (Feb 20) may post higher production numbers, while Mercedes-Benz (Feb 20) outlines medium-term goals amid pricing pressures.
• Economic Data: UK CPI inflation (Feb 19) forecasted at 2.8% YoY. Germany ZEW Economic Sentiment (Feb 18) expected to rise. U.S. FOMC Meeting Minutes (Feb 19) will provide insight into rate outlook. Euro-area and UK Flash PMIs (Feb 21) will update growth expectations.
• Trade & Policy: Trump is scheduled to speak on Feb 18, with markets watching for potential trade policy shifts. U.S. Initial Jobless Claims (Feb 20) and PCE inflation data (Feb 21) will shape Fed expectations.

For more related content about last week's events, see: Key stories from the past week