Markets fluctuate on AI fears while gold weakens as US–Iran talks show progress

US equities traded mostly flat on Tuesday afternoon, trimming earlier losses as gains in financials offset continued weakness in technology and software stocks following fresh Federal Reserve commentary. The S&P 500 edged 0.20% higher, the Dow added 0.10%, while the Nasdaq 100 hovered near unchanged. Software and cloud stocks remained under pressure amid ongoing AI-related disruption concerns, with several large-cap names declining sharply. Semiconductor performance was mixed. The financial sector drew support after Federal Reserve Vice Chair Michael Barr signalled that rates could remain steady “for some time,” reinforcing net interest margin expectations. Bank shares responded positively as investors looked ahead to the Fed minutes and the core PCE inflation report later this week.

European stocks closed higher, rebounding after several subdued sessions as gains in financials and consumer discretionary stocks drove the advance. The Eurozone’s  STOXX 50 rose 0.70% to 6 022 points, while the pan-European STOXX Europe 600 added 0.50% to 621, hovering just below last week’s record high. Banks and insurers outperformed, supported by another constructive session in benchmark sovereign bond markets. Automakers and luxury goods producers also gained on expectations of potential US tariff reductions on metals and optimism around resilient holiday retail demand in China.

Japan’s Nikkei 225 fell 0.42% on Tuesday, marking a fourth straight decline, while the broader TOPIX slipped 0.68%. Losses were concentrated in technology and defence sectors, as ongoing concerns over AI-driven disruption across software, business services, and media continued to weigh on growth-oriented stocks. Meanwhile, Mainland China, Hong Kong, Singapore, Taiwan, and South Korea remained closed for Lunar New Year holidays.

South African stocks retreated, with the FTSE/JSE All Share Index falling more than 1%, as investor caution offset improved labour market data. Technology, industrial, and consumer shares weighed on the market, while the unemployment rate edged lower but reflected a shrinking labour force and lingering job‑seeker discouragement. The rand weakened against the US dollar, trading around R16.11/$ at 17h30 on Tuesday afternoon, as broader dollar strength overshadowed domestic fundamentals, keeping the currency under pressure.

Crude oil and precious metals both retreated on Tuesday as easing geopolitical and safe-haven pressures weighed on commodity markets. US crude fell 0.89% to settle at $62.33 per barrel, while Brent crude dropped 1.79% to $67.42, hitting a two-week low amid signs of progress in negotiations between the US and Iran that eased supply concerns. Meanwhile, gold dipped to a one-week low as safe-haven demand cooled in the face of a stronger dollar. Spot gold declined 2.21% to $4 882.47 an ounce, while US gold futures slipped 3.16% to $4 863.20 an ounce, reflecting subdued investor appetite for non-yielding assets.