Daily Summary – Bessent Rescues the Dollar, Fed Delivers Hawkish Pivot

The S&P 500 index surpassed the 7,000-point mark today for the first time in history. While futures had been hovering near this level for several days, they also climbed to fresh all-time highs today.

A slightly hawkish tilt in the Fed's decision, however, triggered a minor correction on Wall Street.

The Fed left interest rates unchanged and shifted its rhetoric from "dovish" to "moderate." Despite this, the market likely anticipated even more hawkish commentary.

The Fed pointed to a stabilization of the unemployment rate and a reduction in labor market risk factors. At the same time, it noted persistent inflation and increased economic activity.

Powell emphasized that the Fed will remain independent. He warned that if this independence were lost, it would signal the end of the central bank's credibility.

A major event today was Scott Bessent’s televised appearance, where he moved to rescue the dollar following yesterday’s sell-off. EUR/USD had earlier tested the 1.20 level.

Bessent stated that the US did not intervene in the Yen and reaffirmed that the dollar remains a strong currency. The dollar had weakened on Tuesday following Trump’s comments that he was "comfortable" with a weaker currency to improve US competitiveness. However, dollar weakness contradicted the need to promote growing US borrowing requirements to global investors.

The EUR/USD pair tested the 1.20 level during Powell’s press conference.

Crude oil continues its rally, with WTI currently testing levels above $63 per barrel, the highest since September 2025. This is linked to the growing risk of a US strike on Iran.

Mobilization of US rapid strike forces continues in the Middle East. Anti-government protests in Iran are being brutally suppressed, crossing "red lines" set by Trump. Trump is pressuring Iran to sign a new nuclear deal with the US. While Iran initially hinted at a retaliatory strike in the event of US intervention, it is now signaling a willingness to negotiate.

ASML announced record results for Q4 2025 and the full year, with revenues of €32.7 billion and net profit of €9.6 billion. Shares initially surged over 7% to historic highs but later gave back approximately 2% due to analyst concerns regarding guidance.

LVMH reported 2025 revenues of €80 billion (a 1% organic decline), with operating profit at €17.7 billion (down 9%) and net profit at €10.9 billion (down 13%). Shares plummeted approximately 8% following the release.

After the Wall Street close, Microsoft will report results, with Azure cloud growth projected at nearly 40%, though concerns remain regarding AI CAPEX. Meta is also set to report, with focus on AI and the Metaverse. Tesla is expected to see a year-on-year decline in sales, but investor attention may shift to Robotaxi, non-automotive segments, and overall vehicle margins.

Gold reaches new all-time highs, rising approximately 3% to $5,330 per ounce. Silver also climbed to $114, though at a slightly slower pace than gold. Silver lease rates are falling below 1%, while COMEX has once again raised margin requirements for silver positions.