By Dow Jones Newswires Staff
A precious metals selloff bled into global markets, as U.S. futures followed Asian and European equities down at the European open. Gold and silver tumbled from record highs after President Trump nominated former federal Reserve Governor Kevin Warsh to chair the rate-setting institution on Friday. That selloff continued overnight, with gold holding above $4,600 a troy ounce after topping $5,600 last week. Technology stocks suffered particularly acutely after Nvidia Chief Executive Jensen Huang cooled on apparent commitments to invest $100 billion in OpenAI, and Oracle said it planned to raise $50 billion this year.
Meanwhile, oil prices fell back sharply on signs of U.S. and Iran negotiations.
--Gold retreated below $5,000 as top commodity exchange CME Group raised margin requirements following a selloff in metals prices. Futures in New York were down 1.9% to $4,653.60 a troy ounce. CME said higher margin requirements for precious metal futures will take effect after Monday's close. Rising margin requirements raise the cost of holding positions, forcing traders to commit more capital and typically weighing on prices and trading activity. Meanwhile, silver steadied at $78.855 an ounce--nudging up 0.4%--after dramatic falls over the weekend.
--Oil prices plunged nearly 5% as negotiations between the U.S. and Iran eased supply concerns. Brent crude slid 4.6% to $66.10 a barrel, while WTI was down 4.7% to $60.92 a barrel. Trump told reporters that he believes Iran is negotiating seriously with the U.S., tempering concerns about an imminent confrontation that could disrupt supplies in the oil-rich region. "This removed some risk premium out of the market, even as US military presence in the region continues to build," ANZ analysts said. "Nevertheless, tension remains high." A firmer U.S. dollar also pressured prices by making dollar-denominated commodities more expensive for overseas buyers. Separately, key members of OPEC+ agreed to keep oil output unchanged at their Sunday meeting.
--U.S. futures traded down, tracking Asian and European equities. The Dow Jones Industrial Average was down 0.4%, while the S&P 500 fell 0.7% premarket. Meanwhile, futures for the tech-heavy Nasdaq were down 1%. Oracle shares were down 3.5% and Nvidia slipped 2% premarket.
--Stocks in Asia were down at the close, with the Kospi falling sharpest. The Korean index was down 5.6% as tech names suffered, with chipmakers Samsung Electronics and SK Hynix falling 6.3% and 8.7%, respectively. The Japanese Nikkei 225 index dropped 1.3%, pushed lower by energy stocks and financials, while Hong Kong's Hang Seng declined 2.2%. Electric-vehicle maker BYD fell 4.4%. China's benchmark Shanghai Composite fell 2.5%.
--European indexes fell across the board at the open. London's FTSE 100 dropped 0.5%, driven down by gold and silver miners. Endeavour Mining tumbled 8.4%, while Fresnillo and Antofagasta fell 7.7% and 6%, respectively. Defensive stocks including Unilever and Coca-Cola gained. Tech stocks fell sharply on broader risk-off sentiment. The Dutch AEX dropped 0.9% as ASML and ASM dropped 3.4% and 2.9%, respectively. Dual-listed STMicroelectronics was down 3.6% in Paris and Milan. The Italian FTSE MIB slipped 0.8% as banks and energy stocks fell. The same sectors drove the CAC 40 down, which fell 0.5% in Paris. Food company Danone climbed 2.2%, while TotalEnergies and ArcelorMittal were down 2.7% and 2.1%, respectively. The German DAX slipped 0.4%, with Siemens Energy down 3.25%.
--The dollar rose in the wake of President Trump's nomination of Kevin Warsh as Federal Reserve Chair. Previous speeches from Warsh suggest he will favor reducing the Fed's balance sheet over coming years, Jefferies economist Mohit Kumar said in a note. Warsh could also favor less accommodative policy if inflation is seen as getting entrenched, he said. The DXY dollar index rose 0.1% to 97.108, having reached a one-week high of 97.298 overnight.
--Treasury markets were steady. U.S. Treasury yields declined in Asian trade, reversing Friday's rises in long maturities triggered by Trump's nomination of Warsh. Eurozone government bond yields were little changed in early European trading. The two-year Treasury yield fell 2.3 basis points to 3.502%, the 10-year yield declined 2.3 bps to 4.217% and the 30-year yield fell 1 bp to 4.862%. There is no eurozone bond supply on Monday, with supply set to slow in February after a busy January. The 10-year German Bund yield edged lower by 0.2 basis points to 2.841%, according to LSEG. Ten-year U.K. government bond yields fell 2 bps to last trade at 4.502%.
-- Bitcoin inched up 0.3% at the European open but remains weak, continuing to trade below $80,000 after. The cryptocurrency last traded at $76,663 after hitting a 10-month low overnight of $74,546 overnight, LSEG data show.
Write to Barcelona Editors at barcelonaeditors@dowjones.com
(END) Dow Jones Newswires
02-02-26 0437ET
