Safe-haven buying surges, technology stocks lead the rally, and a new "capital rotation" pattern emerges in global markets

Yesterday, the global financial markets experienced a significant risk reassessment. Driven by escalating geopolitical tensions, safe-haven assets became the focus of capital flows. Gold performed remarkably, rising 2.66% in a single day to $4,446.7 per ounce, hitting a recent high. Meanwhile, crude oil, a barometer of the global economy, also rebounded, with WTI reclaiming the $58 mark, up 1.78% to $58.35 per barrel.

Commodities Rise in Unison, Supply Concerns Worsen

Behind the broad strength in commodity markets lies market concern over global supply chains. LME copper broke through the $13,000 per ton level, reaching a new high of $13,053, supported by rising expectations regarding US tariff policies—if tariffs are implemented, imported copper prices may face pressure. At the same time, political instability in Chile, a major copper producer, has transmitted to commodity markets, with the RMB facing pressure against the Chilean Peso. Additionally, a copper strike in Chile has raised supply gap worries, and low inventories in LME-registered warehouses have further fueled market expectations.

Silver saw even more substantial gains, rising 5.1% in a single day, reflecting heightened risk aversion. The US dollar index, after spiking, retreated slightly, down 0.08% to 98.35, breaking its three-day winning streak, indicating a re-pricing of market risk appetite.

US Stock Market Gains Across the Board, Tech Remains the Core Driver

Despite macro uncertainties, the US stock market continued to rise across the board. The Dow Jones increased by 1.23%, the S&P 500 by 0.64%, and the Nasdaq by 0.69%. All three major indices advanced together. Notably, energy stocks performed strongly—ExxonMobil and ConocoPhillips each rose over 2%, with Chevron surging 5.1%, making it the best-performing component of the Dow.

Technology stocks also showed impressive performance. Tesla rose 3.1%, Amazon gained 2.9%, reaffirming the market’s continued attraction to AI themes. Chipmaker Ambarella’s US ADR surged 5.5%, continuing to be favored by investors. However, it’s worth noting that major chip stocks initially rose 2.5% during the session but closed down 0.4%, indicating a tug-of-war in capital flows.

European Stocks Mostly Up, Regional Divergence Widens

In Europe, the FTSE 100 rose 0.54%, the DAX 30 gained 1.34%, while the CAC 40 was more modest, up only 0.2%, reflecting differing recovery paces among major European economies.

Crypto Continues Uptrend, Resonating with Traditional Markets

The crypto market continued its recovery alongside risk appetite. Bitcoin rose 1.98% in 24 hours, currently at $968,300; Ethereum increased 1.88% to $33,600. The simultaneous strength of these two major cryptocurrencies indicates increasing market linkage with global risk assets.

Hong Kong stock index futures closed at 26,562 points overnight, up 215 points from yesterday’s close, with the Hang Seng China Enterprises Index futures also rising, showing a steady improvement in Asian market sentiment.

Manufacturing Data Weak, Employment Pressures Persist

However, the global economic outlook remains cautious. US December manufacturing data disappointed, with the ISM Manufacturing Index at 47.9, below the previous 48.2 and short of the market expectation of 48.4. This marks the tenth consecutive month below the 50 expansion/contraction threshold, indicating continued contraction in US manufacturing activity.

Within the details, the new orders sub-index was 47.7, marking the fourth consecutive month of decline, with export orders remaining weak. The employment sub-index was 44.9, although it slowed its decline, it’s still the 11th consecutive month of contraction. The only bright spot was the input prices sub-index at 58.5, above the expected 57, suggesting cost pressures remain.

New Rate Policy Judgments Emerge, “Neutral Level” Becomes Key

Federal Reserve officials recently shared their latest views on interest rates. The President of the Minneapolis Fed stated that the current rate may be close to the neutral level for the economy, and future policy will be data-driven. He acknowledged that the economy’s resilience has exceeded expectations, implying that current monetary policy has not exerted significant downward pressure on the economy. This statement provides a new reference framework for markets to interpret future Fed policy.

Officials noted that further actions depend on more data, especially weighing inflation against labor market conditions. While there is a risk of inflation rebounding, they also see the possibility of a sudden rise in the unemployment rate.

Former Treasury Secretary Warns of “Fiscal Dominance” Risks, Calls for Attention to Debt Issues

Former US Treasury Secretary and former Fed Chair Janet Yellen warned at the Economic Society annual meeting that “fiscal dominance” (i.e., fiscal policy hijacking monetary policy) poses an increasing threat to the US economy. She pointed out that the long-term risk lies in the continued growth of debt, which could force the central bank to keep interest rates low to ease government debt burdens rather than focus on controlling inflation.

Yellen emphasized that if policymakers succeed in compelling the Fed to use low interest rates to alleviate fiscal pressures, the US economic outlook could face severe challenges. She stressed that this risk is intensifying and warrants high attention.

Robot Wave Arrives, Tech Giants Showcase Their Capabilities

In the tech sector, a competition for household robots is heating up. An AI company-backed enterprise launched “Neo,” a humanoid household robot priced at $20,000, with subscription options at $499 per month for at least six months, planning to deliver in the US this year and expand to other markets next year.

Neo is about 168 cm tall, weighs around 30 kg, equipped with high-precision mechanical arms with 22 degrees of freedom each, capable of tasks such as folding clothes, picking up objects, cleaning, watering plants, and more, with automatic charging. It can lift up to 154 pounds and carry objects weighing up to 55 pounds, with a single charge lasting up to 4 hours. Its built-in large language model enables natural conversations, environmental recognition, and memory of interactions.

Qualcomm, another chip giant, also announced a new robotics architecture and processor series, entering the industrial and humanoid robot markets. This high-performance processor is designed for autonomous industrial mobile robots and full-sized humanoid robots, integrating edge computing, AI inference, and hybrid critical systems. Qualcomm aims to compete for the next-generation robot market by leveraging its 40 years of experience in mobile chips to optimize power consumption.

Another major chip company released a series of AI models and tools to accelerate autonomous vehicle development and support next-generation robots. Its latest automotive platform features a new architecture that allows vehicles to perform reasoning and decision-making in real environments, capable of handling scenarios like traffic light failures, converting sensor data into actionable solutions.

Market Data Snapshot

• US Stocks: Dow +1.23%, S&P +0.64%, Nasdaq +0.69%
• European Stocks: DAX +1.34%, FTSE 100 +0.54%, CAC 40 +0.2%
• Bond Market: US 10-year benchmark yield around 4.15%, down 4 basis points from the previous trading day
• Commodities: Gold +2.66% to $4,446.7/oz; WTI crude +1.78% to $58.35/barrel
• Forex: US Dollar Index -0.08% to 98.35; EUR/USD +0.02%
• Crypto: Bitcoin +1.98% to $96,830; Ethereum +1.88% to $3,360