All markets surge overnight! The Federal Reserve makes a major statement!

Technology stocks rally across the board.

In the overnight U.S. stock market, a rebound in tech stocks boosted market sentiment, with the Nasdaq rising nearly 1% and the Dow hitting a new all-time high. Precious metals led by gold and silver surged across the board, with COMEX gold futures up over 2% and COMEX silver futures soaring 8%.

Analysts pointed out that the continued weakening of the dollar has provided additional support for risk assets and gold and silver. On February 9, Eastern Time, the dollar weakened sharply, with the dollar index, which measures the dollar against six major currencies, falling 0.84% and breaking below the 97 level. In response, Atlanta Fed President Bostic said he is beginning to see doubts about confidence in the dollar. Fed Governor Mester stated that the current level of dollar decline has not yet had a substantial impact on monetary policy.

Strong Gains Across the Board

On February 9, Eastern Time, the three major U.S. stock indices opened lower and then rose, with the Dow reaching a new all-time high, and the S&P 500 approaching its record high. At the close, the Dow rose 0.04%, the S&P 500 gained 0.47%, and the Nasdaq increased 0.90%.

Most large-cap tech stocks gained strength, with Oracle soaring over 9%, Microsoft, Broadcom, and AMD rising over 3%, Nvidia and Meta up more than 2%, Tesla up over 1%, and Google closing slightly higher; Apple fell over 1%, and Amazon saw a slight decline.

On the news front, Oracle’s sharp rise was mainly boosted by D.A. Davidson upgrading its rating. D.A. Davidson analyst Gill Luria believes that the market’s sell-off of Oracle may have been overdone.

Google’s parent company Alphabet plans to raise $20 billion through issuing U.S. dollar bonds, exceeding the previously expected $15 billion. The issuance attracted over $100 billion in orders.

Additionally, analysts believe that the capital expenditure of super-large cloud providers still has room to grow. In a recent report, Morgan Stanley stated: “As the monthly token processing volume grows exponentially, the revenue growth of GCP/AWS/Azure accelerates, data center commitments expand, and data center component suppliers emphasize increasing demand, we believe that the capital expenditure estimates for super-large cloud providers will continue to face upward pressure.”

Morgan Stanley strategist Michael Wilson pointed out that revenue growth expectations for large tech stocks have reached multi-decade highs, and valuations have declined after recent market volatility. The decline in software stocks has provided some individual stocks with “attractive entry points.”

CFRA’s Sam Stovall said that the previous adjustment in the tech industry was a necessary digestion of overvaluation. The industry is expected to grow earnings per share by 32% in 2026 and another 20% in 2027, compared to the S&P 500’s projected increases of 13% and 16%, respectively.

Meanwhile, the precious metals market also rebounded across the board, with COMEX gold futures up over 2%, at $5,084.2 per ounce; COMEX silver futures surged 8%, at $83.05 per ounce.

Crude oil prices also continued to strengthen, with WTI crude futures up 1.27%, at $64.36 per barrel; Brent crude futures rose 1.45%, at $69.04 per barrel.

On the geopolitical front, the U.S. issued guidance to ships passing through the Strait of Hormuz, advising “U.S.-flagged ships to stay as far away from Iranian waters as possible and to verbally refuse to comply if approached by Iranian forces—if Iranian forces board, crew should not resist forcibly.”

The Strait of Hormuz is a critical route for Middle Eastern oil supplies. Due to regional tensions, Iran has previously threatened to close the Strait multiple times.

Latest Federal Reserve Statements

On February 9, Eastern Time, Fed Governor Stephen Mester said that the impact of the Trump administration’s tariff policies on the economy is “quite limited.”

Mester also rebutted the common view among economists that tariffs are ultimately borne by U.S. consumers in the form of higher prices, rather than by exporting countries through lower profit margins.

Mester also stated that combining tariffs with other government policy adjustments can help improve the long-term outlook for government finances. Tariff revenues will play a significant role in reducing the basic deficit.

Currently, the legality of the Trump administration’s tariff policies is under review by the Supreme Court, which may overturn these policies. Former President Trump warned that such a ruling would be a disaster.

During a speech at Boston University’s Questrom School of Business on Monday, Mester said that the current level of dollar decline “does not have a significant impact on consumer inflation,” and only severe declines would have an effect.

He added that, regarding the dollar’s decline, “I think so far, it has not had a substantial impact on monetary policy.”

That day, the dollar index weakened sharply, with the dollar index measuring the dollar against six major currencies falling 0.84%, closing at 96.814 in the forex market.

On the same day, Atlanta Fed President Bostic said he is beginning to see doubts about confidence in the dollar. Fluctuations in employment data are another reason the Fed remains cautious.

Regarding the outlook for interest rate cuts, Mester previously stated that potential inflation is not a problem, and there is little evidence of strong price pressures in the economy. The Fed needs to cut rates by more than 100 basis points this year, and he looks forward to Waller’s performance as Fed Chair.

According to CME’s “FedWatch,” as of press time, the probability of the Fed cutting rates by 25 basis points by March is 17.7%, and the probability of holding rates steady is 82.3%. The probability of a cumulative 25 basis point cut by April is 32.4%, with a 63.5% chance of no change, and a 4% chance of a cumulative 50 basis point cut. The probability of a 25 basis point cut by June is 50.4%.

(Article source: Securities Times)