Wall Street experienced another day of market volatility, marked by AI-related concerns. The VIX volatility gauge briefly reached some of its highest levels this year. While the S&P 500 showed little overall change, the software sector faced a significant downturn, reflecting ongoing anxieties about hyperscalers’ AI spending. High-flying stocks, like Walmart, also experienced drops ahead of upcoming results.
In Europe, reports circulated about European Central Bank President Christine Lagarde potentially stepping down before her term concludes in October 2027. While the ECB stated no decision has been made, speculation centres on potential political influence over the selection of her successor. European markets remained relatively calm, as these rumours have been present for some time.
In the United Kingdom, inflation fell to 3%, aligning with expectations and fuelling discussions about a potential Bank of England rate cut next month, though the Sterling remained stable. The FOMC is set to release minutes from its January meeting, which could provide insights into the Federal Reserve’s perspective on the impact of AI on productivity and inflation.
Geopolitically, Iranian Foreign Minister Abbas Araqchi indicated that the U.S. and Iran have reached an understanding on ‘guiding principles’ in nuclear talks; however, the prospect of a final agreement remains uncertain. The Reuters news agency delivers business, financial, national, and international news to professionals via desktop terminals, the world’s media organizations, industry events, and directly to consumers. Reuters, under the Trust Principles, maintains integrity, independence, and freedom from bias.
