* Tech bounces back as investors gauge AI tools, tariff tumult

* Yen weakens on reports Japan PM questioned BoJ rate hike plans

* Trump to announce data centre energy deals during SOTU

* Meta and AMD announce $60bn chip deal, Meta may buy up to 10% of AMD

FX: USD tapped the 50-day SMA at 97.93 before pulling back in quiet trade. FX is relatively quiet with more focus on equity markets, AI and Nvidia’s results coming after the US close. Tariff uncertainties and geopolitical concerns overshadow price action with President Trump’s State of the Union address being watched. The recent top in the Dollar Index sits around 98, more or less the halfway point of the trading range in the second half of last year. US Consumer Confidence rose in February, with consumers feeling less pessimistic about future economic conditions.

EUR traded around the 50-day SMA at 1.1772 with sentiment still the big driver. The world’s most popular currency pair has been consolidating in recent sessions. Initial support sits just below at 1.1741. Macro data has been limited recently with policymakers at the ECB rather comfortable with current policy settings.

GBP traded below the 50-day SMA at 1.3528. The 200-day SMA sits at 1.3442, and the midpoint of the November to January move at 1.3429. We had hawkish comments from known hawk Pill while Governor Bailey said services inflation has not eased as much as the bank thought it would. He also said he wanted additional confirmation of easing inflation before backing a rate reduction. Pricing in money markets predicts an 75% chance of March 25bps rate cut.

JPY underperformed on media stories that PM Takaichi was concerned about BoJ rate hike plans in meetings last week, renewing worries about central bank independence. Thursday’s Tokyo CPI could give cover for a more cautious BoJ, if it follows nationwide inflation data. There were also reports that the ‘rate checks’ that took place when JPY fell in January were initiated by US Treasury Secretary Bessent rather than Japan’s request. The major closed on the 50-day SMA at 155.93.   

US stocks: The S&P 500 gained 0.77% at 6,890, the Nasdaq was 1.09% higher at 24,977 and the Dow Jones settled higher by 0.76% at 49,175. All sectors apart from Healthcare and Energy were in the green, with Consumer Discretionary, Industrials and Tech leading the way. Anthropic eased AI concerns by unveiling 10 new ways for business customers to use its tech for their work, which eased AI disruption worries. AMD surged 8.8% after it signed a $60bn 5-year deal to supply chips to Meta, while the Facebook owner could take a stake of up to 10%. Salesforce jumped 4.1% after the Anthropic presentation and ahead its results after the close today. Options markets say the stock is forecast to move +/- 8.7% on Thursday. Novo Nordisk said it would cut Ozempic and Wegovy prices by up to 50% starting in January 2027, according to the WSJ.

Asian stocks: Futures are mixed. APAC stocks traded positive even after the weak Stateside handover. The ASX 200 saw tech and financials weigh on more positive mining and energy stocks. The Nikkei 225 rallied above 57,000 on its return though tech was the laggard. The Hang Seng and Shanghai Comp were mixed with Hong Kong reversing Monday’s rally on tech and pharma losses. The mainland was green as it caught up from its 10-day holiday.

Gold pulled back below $5,200 as the dollar was mildly bid. A few days of buying saw a readjustment in positions.  Russia said on Friday that its central bank sold gold from its reserves in January, the first decline in holdings since October.

Day Ahead – Nvidia earnings

The AI bellwether and semiconductor giant’s results are due after the US market close. NVDA is the world’s biggest company by market value so will hold sway over the wider indices due to its heavy weighting. Sentiment will impact earnings growth for the whole market, while commentary should give clues on AI spending trends worldwide. The tech sector is obviously under pressure, with questions around valuations, AI disruption and huge capex plans by Big Tech. Certainly, chip demand and supply chain bottlenecks causing chip shortages will be of interest.

Whether Nvidia beats its revenue guidance this quarter and/or exceed consensus next quarter will also be key. Those figures are $65.0 billion, which was management’s guidance for the January 2026 quarter, and $71.7 billion, which is the consensus estimate, for the current quarter ending in April. Otherwise, gross margins are predicted at 75%. That will indicate strong pricing power and/or whether costs are rising in the near term.

Chart of the Day – NVDA tracking sideways

Options markets predict NVDA could move 4.8% in the trading session after the release. The stock has risen 18x in the three years since ChatGPT went public in late 2022. But it has stalled lately (+2% in 2026) and is in the bottom half of the Mag 7 over the last six months. Prices have traded in a range for some time between $164 and $195 with the upside breakout to the record high at $212.19, the only major move. Otherwise, prices have traded around the 50-day and 100-day SMAs at $186.16/17 in recent weeks. The 200-day SMA sits at $173.95 while initial resistance resides just below $195.