Market Update as of 29 January 2026

U.S. Markets:
U.S. equities closed mixed on Thursday as weakness in technology weighed on sentiment despite selective earnings strength. The S&P 500 slipped 0.1% and the Nasdaq 100 fell 0.5%, while the Dow edged 0.1% higher. Microsoft plunged 10% after flagging slower cloud growth alongside heavy AI-related spending, dragging software stocks lower and reigniting valuation concerns. In contrast, Meta surged over 10% on upbeat guidance, while IBM and Caterpillar outperformed after delivering earnings beats. Treasuries firmed modestly, oil prices rose on geopolitical risks, and gold eased as investors remained cautious amid earnings uncertainty.

Bonds and Policy Outlook:
The U.S. 10-year Treasury yield remained above 4.25%, near five-month highs, after the Federal Reserve kept policy rates unchanged at 3.5%-3.75%. Two FOMC members dissented in favour of a 25bp cut, reinforcing uncertainty around the policy path, though markets continue to price roughly two cuts this year. Expectations of a steeper yield curve persisted as the Fed reinvests maturing securities into shorter-dated bills. Long-term yields also faced pressure from tariff threats and global policy shifts, keeping rates sentiment fragile.

Europe:
European equities declined on Thursday as weak corporate earnings weighed on sentiment. The STOXX 50 fell 0.7% , and the STOXX 600 slipped 0.2%, led by a sharp sell-off in SAP after disappointing cloud revenue and cautious backlog guidance. Technology stocks lagged, while ABB surged on strong results and Roche gained on resilient earnings. Macro data were more constructive, with confidence indicators improving and credit growth strengthening, pushing the Economic Sentiment Indicator to a three-year high and signalling gradual recovery momentum.

Asia:
Chinese equities extended gains on Thursday as mining and property stocks advanced on easing signals and rising metals prices. While industrial profits stabilised and liquidity injections supported sentiment, weak domestic demand, falling investment, and declining FDI continued to highlight structural challenges. Japanese equities rebounded on improved global sentiment and easing geopolitical tensions, though fiscal uncertainty and bond-market pressures persisted amid expansionary policy signals.

Market Volatility:
Volatility rose further, with the VIX climbing to 16.79 for the week, though it remains below its long-term average.

In the week ahead (Feb 2-6):
Markets will focus on U.S. ISM data, ADP jobs, Eurozone CPI, BoE and ECB meetings, and U.S. and Canada employment reports.