This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
U.S. tariff on Colombia called off
Colombia agreed to accept military aircraft carrying deported migrants, the White House said on Sunday. That marks a reversal from Colombia’s earlier decision to reject two aircraft, which prompted U.S. Donald Trump to write on his social media platform Truth Social he would immediately impose tariffs on goods from Colombia.
Factory output in China contracted
China’s official purchasing managers’ index for January came in at 49.1, data released by the National Bureau of Statistics on Monday showed, below Reuters poll estimates of 50.1. That means the country’s factory activity unexpectedly contracted, partly because of a slow season ahead of the Lunar New Year. However, industrial profits in December jumped 11% from a year earlier, their first growth since July.
Second winning week for U.S. stocks
Major U.S. indexes retreated on Friday, but still ended the week higher, their second consecutive week of gains. Asia-Pacific markets were mostly higher on Monday. Japan’s Nikkei 225 bucked the trend and fell around 0.9%. The index was weighed down by chip-related stocks, which retreated on worries that China’s DeepSeek artificial intelligence model threatens Asian tech companies in the U.S. AI value chain.
China’s AI aims for more than chatbots
Chinese AI applications are moving beyond chatbots, such as those from OpenAI’s ChatGPT and Anthropic’s Claude.ai. For instance, Baidu’s Wenku platform, which creates presentation decks and other documents, reached 40 million paying users, while Alibaba’s Accio, an AI-powered search engine for product sourcing, has 500,000 small business users globally.
Trump’s intentions with TikTok
Trump is making a deal to save TikTok’s operations in the U.S., Reuters reported, citing two people with knowledge of the discussions. The sources said the deal would involve Oracle. However, in comments made to reporters on Air Force One on Saturday, Trump denied Oracle’s participation, and said “very substantial people” are talking to him about buying TikTok. One of the parties could be Perplexity AI, which revived its proposal to ByteDance.
[PRO] Earnings dominate week
Meta Platforms, Microsoft and Tesla announce their earnings on Wednesday, followed by Apple on Thursday — analysts think the reports could determine the direction of markets. Meanwhile, the U.S. Federal Reserve concludes its meeting on Wednesday, when investors will scrutinize Chair Jerome Powell’s comments for hints on the path of interest rates.
The bottom line
The S&P 500 has been shuffling sideways since its post-election jump in November —in fact, it ended 2024 lower than where it was at in the beginning of December.
There are signs the markets are finally awakening from their hibernation. While some of the Magnificent Seven stock struggled on Friday, both Alphabet and Meta Platforms ended the day at all-time highs on optimism around their AI offerings.
And even though all major U.S. benchmarks slipped on Friday, they still ended the week higher for the second consecutive time. The S&P and Nasdaq Composite each rose around 1.7% last week, while the Dow Jones Industrial Average climbed 2.2%.
The S&P closed at a fresh high on Thursday and etched a new intraday peak during Friday’s session. Impressively, it only took eight sessions for the index to rally from a two-month low to a record high, noted Sundial Capital Research founder Jason Goepfert.
That rapid turnaround suggests that investors are growing convinced that the bull market is trotting back.
Some of that sentiment can be traced to Trump’s remarks at the World Economic Forum in Davos, Switzerland, such as his pledge to “demand that interest rates drop immediately” and comment that he would “ask Saudi Arabia and OPEC to bring down the cost of oil.”
Lower interest rates, in general, boost economic activity, while cheaper oil reduces costs for businesses.
But some analysts are worried investors might be cheering a mere phantom.
“So far, markets have reacted to every statement made by the President, even those that should not have any impact,” said Mark Malek, chief investment officer at Siebert. “This shows that traders have not yet settled into their pace.”
Indeed, perhaps a more realistic sentiment of the markets can be interpreted from gold prices. Spot gold prices rose on Friday to their highest levels in almost three months, signaling that some investors are turning to the precious metal for safety amid uncertainty.
For those chasing the bull market, it might pay to first listen to what the bullion has to say.
— CNBC’s Alex Harring, Yun Li and Sarah Min contributed to this report.
