Daily Summary: Powell pulls markets back up! 📈 EURUSD higher

American indices started the day very poorly, despite a strong start to the earnings season by banks. At the opening, the main indices were down more than 1%. The situation was reversed only by Jerome Powell, whose speech was perceived by the market as a reason to change sentiment. By the end of the session, almost all American stock indices were in positive territory. The Russell 2000 rose the most, by 1.3%, while the Nasdaq performed worse, hovering around the opening level, and the S&P 500 and Dow Jones gained about 0.5%.

Today, American banking giants presented their financial results. JP Morgan, Goldman Sachs, Wells Fargo, and Citigroup exceeded market expectations in terms of both revenue and net profits. Despite solid results, most banks ended the session with declines, except for Wells Fargo, whose shares gained value. This discrepancy may suggest that investors see relatively better conditions in commercial banks compared to investment banks, which may be a result of concerns related to hidden risks in the latter segment, especially in the context of the recent scandal related to the bankruptcy of First Brands.

Salesforce and Walmart announced their collaboration with OpenAI. The retail giant raised its valuation by 4%, but Salesforce wasn't as fortunate, losing over 1% of its valuation despite the collaboration.

European markets ended Tuesday's session with moderate declines, not reacting in time to Jerome Powell's later speech. Partial easing of political tensions in France and better-than-expected results from Ericsson were not enough to improve investor sentiment. Only after comments from the Fed chairman, which were perceived as somewhat more dovish, was there an improvement in sentiment in the futures market. Contracts on the French FRA40 gained about 1.4%, and the Spanish SPA35 rose by 0.7%. However, the German DE40 and Warsaw's W20 remained under pressure, indicating investor caution regarding the prospects of the European economy.

Negative sentiment once again dominated the Warsaw market, with mining companies being the main source of downward pressure this time. The WIG20 closed the session with a result of -1%.

In the commodities market, there were noticeable declines in energy prices. Oil contracts fell by over 1% at the end of the session, continuing a correction after a previous rebound. Concerns about demand in the context of signals of economic slowdown and increasing supply are putting pressure on prices. Even sharper declines were recorded in natural gas, whose contracts fell by about 2%, aided by milder weather forecasts and stockpiles in the USA.

In the agricultural commodities segment, gains were dominant, particularly visible in the cocoa, sugar, and coffee markets. Cocoa prices rose by over 1%, continuing an upward trend supported by ongoing supply issues in West Africa. Sugar contracts increased by 2%. Coffee saw an even stronger upward movement, with contracts rising by over 4%. Investors are reacting to reports of lower production in South America.

Investors decided to realize some profits after recent gains in the industrial metals market. Copper prices fell by about 1.5%, and zinc lost over 2%.

Despite a slight improvement in sentiment at the end of the session, sentiment in the cryptocurrency market remains clearly negative. Not only are major digital currencies losing value, but also companies related to the crypto industry. The ongoing capital outflow from the digital asset market is translating into declines in Bitcoin and Ethereum of over 2%, while smaller tokens are experiencing even deeper price drops of 4–5%.

The President of the European Central Bank tried to calm investor sentiment today, emphasizing that despite a more restrictive monetary policy, there is currently no risk to the stability of the debt market in Europe. She also noted that the disinflation process is nearing its end, and the labor market situation remains solid. These statements supported the common currency, with the euro strengthening significantly against most major pairs, recovering recent losses.

The speech by the Governor of the Bank of England also attracted investor attention today. He pointed out growing risks to financial stability, including potential overvaluation of companies in the artificial intelligence sector, threats related to increasing cyberattacks, and ongoing pressure in the labor market. As a result of his statements, the British pound ended the day with slight weakening against major currencies.

Companies related to the extraction and processing of rare earth metals continue their upward trend, gaining amid escalating tensions in the global trade war. Investors view this segment as a potential beneficiary of increasing pressure to become independent from Chinese suppliers of strategic raw materials. US Rare Earth and MP Materials saw their prices rise by about 3% today.