Global stock markets are showing a mix of cautious resilience and volatility. On this Friday in late January, investors are reacting to Big Tech earnings, speculation over U.S. Federal Reserve leadership under President Donald Trump, and surprising economic strength. The S&P 500 hovers near 7,000, while South Korea’s Kospi sets new records, highlighting divergence across global markets.
Mixed Closes and Futures Pressure
Thursday, January 29, reflected the market’s mixed mood. In the U.S., the S&P 500 closed at 6,969.01, down 0.13 percent after touching record highs earlier in the week. Meanwhile, the Dow Jones Industrial Average rose 0.11 percent to 49,071.56, helped by strong industrial stocks such as Caterpillar and Honeywell. In contrast, the Nasdaq Composite fell 0.72 percent to 23,685.12, dragged down by Microsoft.
Looking ahead, futures suggest continued pressure. S&P 500 futures are down 0.7 to 0.8 percent, while Nasdaq futures lag further. Investors are now awaiting Apple’s earnings report, which could calm or worsen the tech rotation.
Across the Pacific, Asia shows strength. South Korea’s Kospi rose 1.0 percent to 5,221.25, driven by domestic optimism and AI gains despite U.S. tariff threats. Japan’s Nikkei 225 remained flat at 53,375.60, while Hong Kong’s Hang Seng increased 0.5 percent to 27,968.09, aided by property sector relief measures in China.
In Europe, futures indicate a tentative rebound. Germany’s DAX is up 0.5 percent, France’s CAC 40 climbs 0.6 percent, and the UK’s FTSE stays flat. This follows Thursday’s declines, with the Euro Stoxx 50 down 0.7 percent after disappointing earnings from SAP and Nokia.
The Big Tech Earnings Rollercoaster
The volatility comes from this week’s Big Tech earnings. Microsoft, a key player in cloud and AI, disappointed despite beating estimates. Shares fell 10 percent, wiping out over $350 billion in value. Slower Azure growth of 38 percent and planned spending of $110 billion for 2026 raised investor concerns.
In contrast, Meta Platforms surged 10.4 percent on strong ad revenue growth of 24 percent. Its $135 billion AI investment appears to be boosting engagement and targeting. Tesla plans to double AI and autonomy spending to $20 billion. Shares dipped 3 percent but recovered slightly post-earnings.
Apple beat expectations with $143.76 billion in revenue and strong iPhone sales. However, investors are watching its AI strategy closely due to a memory crunch.
Market analyst Richard Kim said, “Investors reward tangible revenue gains and penalize unchecked spending without clear returns. The AI story is maturing quickly.”
Fed Leadership Drama
Speculation over Trump’s Fed chair pick adds uncertainty. Kevin Warsh, a former Fed governor and Morgan Stanley executive, is the frontrunner with 94 to 95 percent odds. The announcement is expected today.
Warsh is seen as hawkish but aligned with Trump’s preference for lower rates. His nomination could lead to tighter policy, pushing 10-year Treasury yields to 4.27 percent and strengthening the dollar. This has reduced expectations for easier policy, adding to market jitters.
From AI Euphoria to Trade Tensions
The post-pandemic AI boom, sparked by ChatGPT in late 2022, drove Nasdaq gains of over 50 percent. Tech giants invested billions in infrastructure.
However, 2025 saw a rotation away from pure tech amid inflation above 3 percent and Trump’s return. Tariff threats on South Korea, Europe, and China resemble his first-term policies. Yet global growth remains resilient at 3.3 percent according to the IMF.
Gold surged to $5,598.60, up 4.84 percent, as safe-haven demand grew. Meanwhile, Bitcoin dropped to $81,000.
Geographical Ripples
U.S. tech losses affect global growth stocks. Yet Asia resists the trend. Kospi’s value has doubled over the past year due to AI chip demand in Taiwan and South Korea and government fiscal support.
Europe faces trade fears. French stocks fell on tariff threats to luxury goods, but GDP recovery and defense spending provide support. Emerging markets like Indonesia experienced $80 billion in losses due to transparency concerns.
Economic Fallout
Higher yields and a stronger dollar could slow borrowing and exports. Nevertheless, IMF projects 3.3 percent global growth, helped by tech resilience.
Safe-haven demand boosts gold, which rose 3.36 percent to $5,175.10. Oil prices stalled at $64.28 due to supply gluts and geopolitical risks, including Iran. Markets are rotating toward cyclicals like energy and materials. AI capital spending may slow if returns falter, while crypto volatility rises.
Elena Vasquez concludes, “In this era of AI and policy shifts, resilience may be the ultimate trade.”