By Mike Dolan
Jan 15 –
What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
Wall Street retreated on Wednesday, driven by declines in the “Magnificent 7” megacaps, as investors rotated from expensive technology stocks into value names, but blockbuster results on Thursday from world-leading chipmaker TSMC may calm the horses.
Oil and precious metal prices also reversed course this morning, falling on tenuous signs that U.S. President Donald Trump might back down from his threats to take action in Iran. Oil dropped early on Thursday, gold slipped from its record high, and silver retreated from its fresh peak of $93.57 earlier in the session.
I’ll get into all that and more below, but first, check out my latest column on whether the dollar’s big unwind is already running out of steam.
And listen to the latest episode of the Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.
Today’s Market Minute
* Speaking with Reuters in the Oval Office, U.S. President Donald Trump said Iran’s clerical government may collapse, blamed Ukraine President Zelenskiy for the stalemate in Russia talks and dismissed Republican criticism of a probe of Fed Chair Powell.
* Taiwanese chipmaker TSMC posted a forecast-smashing 35% jump in fourth-quarter profit to a record high as it signalled strong annual growth and further U.S. investment.
* Simultaneous geopolitical flare‑ups have jostled oil prices, creating a treacherous environment for investors even as a large supply glut still looms over the market, notes ROI energy columnist Ron Bousso.
* Nicolas Maduro’s ousting may mark the beginning of a broader U.S. attempt to realign Latin America geoeconomically, limiting Russia and China’s influence in the Western Hemisphere, argues Martin Vladimirov of the Center for the Study of Democracy.
* While the U.S. CPI inflation report on Tuesday showed a slightly softer-than-expected annual increase in core prices, there’s little reason for consumers or policymakers to cheer, writes ROI markets columnist Jamie McGeever.
HEAD-SPINNING ROTATION
Major U.S. equity indexes fell on Wednesday, as investors sought to rotate from frothy growth names into value. This was driven largely by declines in the “Mag Seven,” which were hit in part by Trump’s announcement of a 25% tariff on some chip imports. Bank shares also dropped, as the industry has had a disappointing start to the earnings season this week.
Ultimately, the main trend we’re seeing is a new year sector rotation. Even though high-flying tech dialed back yesterday, U.S. small caps continued to push ahead. What seems clear is that investors want to remain invested and have just become a bit choosier as to where they’re putting their money.
The selloff extended into Asia trading on Thursday, with Japan’s Nikkei easing 0.9% after reaching an all-time high on Wednesday, as investors reduced exposure to chip and artificial intelligence-related stocks.
Yet the promise of AI remains strong, as chipmaking juggernaut TSMC posted blockbuster results on Thursday, including a 35% rise in fourth-quarter profit to a record high. Invoking what it called the “AI mega trend”, the chipmaker said it expects a nearly 30% rise in revenue in 2026. This comes as it looks set to boost investment in the U.S. in return for an apparent reduction in tariff rates to 15% from 20%.
The other major moves this morning were the declines in oil and gold prices after President Trump said he had been informed that Tehran’s killing of demonstrators was subsiding and that no plans were in place for executions.
The dollar index steadied against major peers on Thursday, as Trump stated in a Reuters interview that he had no plans to fire Fed Chair Jerome Powell, days after his administration announced a criminal probe into the Fed Chair that drew broad condemnation. The recent slew of fairly healthy U.S. economic data has solidified expectations that the Fed will hold rates steady this month, though markets still expect two cuts this year, likely after Powell’s term ends in May.
Whether today’s apparent lull in safe-haven demand will have any staying power is an open question. Trump appears to be in wait-and-see mode concerning Iran, having still not ruled out the possibility of military action, his administration’s probe into Powell remains live, and global geopolitics are still fractious as the Trump administration refuses to backdown from its claim that it will acquire Greenland.
Meanwhile, the Japanese yen also stabilized after falling to its weakest point against the U.S. dollar since July 2024 overnight. It recovered some of that ground amid warnings of possible bond-buying intervention by Japanese authorities.
Japanese bond yields have also eased after reaching record peaks on speculation – which has now been confirmed – that Prime Minister Sanae Takaichi, who has supported massive fiscal stimulus, will call snap elections.
Chart of the day
Oil prices have been volatile in recent months amid spikes in geopolitical risk. They reached a three-month high of over $66 a barrel on Wednesday in light of U.S. President Donald Trump’s threats of intervention in Iran’s harsh crackdown on recent demonstrations. However, they dropped sharply on Thursday morning following President Trump’s comments about the killings subsiding in Iran.
Despite all of the geopolitical tensions, prices have remained rangebound in recent months thanks to rising global supply. The U.S. Energy Information Administration expects rises in global inventories of an average of 2.8 million barrels per day in 2026.
Today’s events to watch
* U.S. initial jobless claims (8:30 AM EDT), November import/export prices (8:30 AM EDT), Treasury TIC data (4:00 PM EDT)
* Philadelphia Federal Reserve January business survey (8:30 AM EDT), New York Federal Reserve January business survey (8:30 AM EDT)
* U.S. corporate earnings: Goldman Sachs, Morgan Stanley, and BlackRock
* Federal Reserve Board Governor Michael Barr, Richmond Federal Reserve President Tom Barkin, and Kansas Federal Reserve President Jeffrey Schmid all speak
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(By Mike Dolan )
