Global stock index flat with oil rallying on Iran worries as gold, silver rise
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 28, 2026. REUTERS/Brendan McDermid
NEW YORK/ LONDON, Feb 3 : MSCI's global equities gauge was barely changed on Tuesday as technology stocks pushed Wall Street lower while oil futures rallied after incidents between the United States and Iran and precious metal prices rose to regain some lost ground following a two-day rout.
While diplomats were seeking to arrange nuclear talks between Iran and the United States, oil prices climbed more than $1 after the U.S. military shot down an Iranian drone approaching a U.S. aircraft carrier in the Arabian Sea, according to a Reuters report citing a U.S. official. Separately, Iranian gunboats approached a U.S.-flagged tanker in the Strait of Hormuz, maritime sources said.
Meanwhile, the U.S. dollar was slightly lower after two sessions in a row of gains while the Australian dollar was the standout performer in foreign exchange markets on Tuesday after the central bank joined Japan as the only developed world economy to raise interest rates.
Investor anxiety rose with choppy trading in the CBOE volatility index, which picked up steam early on but in the late afternoon it pulled back from its 20.37 session high to close up 1.66 points at 18.
On Wall Street, indexes ended lower with software stocks weighing on concerns about AI competition. Chipmaker Nvidia fell 2.8 per cent and was the biggest weight, as Reuters reported that ChatGPT developer OpenAI has been seeking faster alternatives to Nvidia's AI chips.
"Any AI related headlines right now are coming out as a negative and a headwind for the broader market. Under the surface there are areas of the market that are acting well but tech is getting hit pretty hard," said Sahak Manuelian, managing director for global equities trading at Wedbush Securities in Pasadena, California.
Technology earnings were also on investors' minds with shares in chipmaker AMD falling 5 per cent after-the-bell trade, following its 1.7 per cent regular session loss, after its quarterly report. Shares in server equipment company Super Micro Computer rose more than 6 per cent in late trade after its report.
At Tuesday's close, the Dow Jones Industrial Average was down 166.67 points, or 0.34 per cent, at 49,240.99 while the S&P 500 finished down 58.63 points, or 0.84 per cent, at 6,917.81 and the Nasdaq Composite fell 336.92 points, or 1.43 per cent, to 23,255.19.
MSCI's gauge of stocks across the globe rose 0.16 points, or 0.02 per cent, to 1,043.93.
Earlier, the pan-European STOXX 600 index < .STOXX > finished up 0.1 per cent for its second closing record in a row but trading was muted by a sharp selloff in software and advertising stocks.
While the heavyweight technology sector was the weakest in the S&P 500, finishing down 2.2 per cent, energy was the strongest group, closing up 3.3 per cent helped by rising oil prices.
Oil prices rallied more than 1 per cent after Monday's 4 per cent loss. Aside from Iran worries oil gained support from a U.S.-India trade agreement, which boosted hopes for global energy demand. And Russia's continued attacks on Ukraine fueled worries that Moscow's oil would remain sanctioned.
U.S. crude settled up 1.72 per cent, or $1.07, at $63.21 a barrel while Brent settled at $67.33 per barrel, up 1.55 per cent, or $1.03 on the day.
Commodities and the dollar have been whipsawed since U.S. President Donald Trump's nomination of Kevin Warsh to lead the Federal Reserve last Friday. While Warsh may be under pressure from Trump to cut interest rates, investors expect that he will look to shrink the Fed's balance sheet, which is seen as a negative for precious metals.
But on Tuesday, spot gold rose 6.14 per cent to $4,951.72 an ounce, after falling about 13 per cent in the prior two sessions. Spot silver rose 7.58 per cent to $85.42 an ounce on Tuesday after tumbling 6 per cent Monday and 27 per cent on Friday.
Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers said Tuesday showed "a little bit of calmness returning back to the markets on the commodity side looking at gold and silver."
In currencies, the Australian dollar strengthened 1.08 per cent versus the greenback to $0.7022 after the Reserve Bank of Australia raised rates by a quarter point to 3.85 per cent, citing above-target inflation and a tight job market.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, took a step back after last week's rally against a range of currencies. The index fell 0.18 per cent to 97.36, with the euro up 0.27 per cent at $1.1821.
Against the Japanese yen, the dollar strengthened 0.09 per cent to 155.74.
In U.S. Treasuries, yields dipped after rising earlier as traders evaluated possible shifts in Federal Reserve policy under Warsh as they faced U.S. economic data delays due to a partial government shutdown.
The yield on benchmark U.S. 10-year notes fell 0.8 basis points to 4.268 per cent, from 4.277 per cent late on Monday while the 30-year bond yield fell 1.1 basis points to 4.8983 per cent.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 0.2 basis points to 3.572 per cent, from 3.57 per cent late on Monday.
