Stocks Tread with Caution, Dollar Firms As Tariff Threat Lingers

Global shares drifted as investors reflected on relatively strong earnings from tech bellwethers in a week that began with a market rout, sparked by the emergence of a low-cost Chinese artificial intelligence (AI) model, Ankur Banerjee reported for Reuters.

Fresh threats from U.S. President Donald Trump regarding tariffs on Mexico and Canada lifted the dollar and pushed gold prices to a record high.

Fresh threats from U.S. President Donald Trump regarding tariffs on Mexico and Canada lifted the dollar and pushed gold prices to a record high as traders braced for the Saturday deadline set by Trump to impose 25% tariffs.

Nasdaq futures rose 0.58% after Apple executives forecast relatively strong sales growth. European futures pointed to a muted open after Europe's benchmark index closed at a record high the previous day.

The pan-European STOXX 600 is on course for a more than 6% gain in January, marking its strongest monthly performance since November 2023.

Technology stocks across the globe stumbled on Monday as investors assessed the implications of the low-cost Chinese AI model, with shares of high-profile tech companies such as Nvidia and Oracle taking a hit.

However, tech stocks have since recouped some of those losses. The CEOs of Microsoft and Meta defended their massive spending, stating that it was crucial to remain competitive in the evolving AI landscape.

Vasu Menon, managing director of investment strategy at OCBC, noted that the DeepSeek development might create some uncertainty and put short-term pressure on AI stock valuations. However, he emphasized that it does not alter the medium- to long-term outlook.