On Monday, January 12th, due to escalating geopolitical tensions surrounding Iran, the price of gold surged to a historic high of $4600 per ounce, marking an increase of over 1.5%. Silver prices also rose by 5%, while the U.S. dollar and Wall Street stock index futures both declined.
The S&P 500 index and Nasdaq futures both dropped by over 0.6% before the U.S. stock market opened, with the VIX fear gauge recording its largest increase since November.
Bond markets are considering the possibility of a short-term interest rate cut in the United States. The STOXX 600 index in Europe approached record highs, while defense stocks reached new peaks. In the foreign exchange market, the Swiss Franc, Euro, and British Pound all strengthened.
Despite fears surrounding the geopolitical situation, especially with more Venezuelan crude oil entering the market, commodity traders did not demonstrate immediate panic, leading to a slight decrease in oil prices. Brent crude oil futures fell by around 50 cents to just below $63 per barrel; U.S. West Texas Intermediate crude oil futures dropped by 45 cents to $58.60 per barrel.
Before market opening, Citigroup, JPMorgan Chase, and Bank of America all experienced declines of 2.5% to 4%, while American Express fell by nearly 5%. Consumer finance companies Synchrony Financial and Capital One saw their stock prices plummet by over 10%.
The U.S. dollar had a weak performance in 2025, with a decline of over 9% against major currencies.
The second full week of the year will see the release of U.S. inflation data, U.S.-China trade data, and a series of U.S. corporate earnings reports. JPMorgan Chase and the New York Bank are set to release their earnings reports on Tuesday.
Federal Fund futures have accumulated a decline of about 3 basis points since the beginning of the year, indicating a potential for more aggressive interest rate cuts by the Fed.
President Trump called for a cap of 10% on credit card rates starting on January 20 for a year.
Lee Hardman of MUFG stated that “the latest developments signify a significant escalation of tensions between President Trump and Fed Chair Jerome Powell.” Powell labeled the threat of criminal charges from the Trump administration as an “excuse” to pressure the Fed into cutting rates. His term as Fed Chair will end in May.
(Adapted from a report by Reuters)