LONDON/BOSTON, Jan 31 (Reuters) - Global stocks increased on Friday after a volatile week for markets, spurred by Apple's earnings report and on-par U.S. inflation data.
Currency traders were preparing for U.S. President Donald Trump's potential implementation of 25% tariffs as the Saturday deadline approached, which could disrupt nearly $1.6 trillion in annual trade.
The U.S. S&P 500 stock index rose by 0.6% and was set to end the week relatively unchanged. The tech-focused Nasdaq gained 1.2%, while on track to finish the week slightly lower.
Earlier in the week, the Nasdaq plummeted by 2.9% due to the rising popularity of low-cost Chinese AI models, causing jitters among investors in U.S. tech stocks and leading chipmaker Nvidia to drop by 17%.
Positive earnings reports from companies like Meta and Tesla have helped improve market sentiment.
Apple contributed to the cautiously positive atmosphere on Thursday by announcing robust sales growth, boosting its stock by approximately 0.5% in Friday’s trading.
Europe's continent-wide Stoxx 600 index rose by 0.1%, with tech stocks climbing by 1.7%.
In the currency markets, options contracts indicated potential fluctuations in the Canadian dollar and Mexican peso . The Canadian dollar edged up by around 0.16% on the day, while the peso rose by 0.5% in .
Trump's looming deadline for imposing punitive tariffs stems from his push for stronger actions from Canada and Mexico to curb illegal immigration, as well as the flow of the dangerous opioid fentanyl and precursor chemicals into the United States.
Market analysts expressed concerns about how the market might absorb the tariffs, with Michael Nizard, multi-asset chief investment officer at Edmond de Rothschild, commenting on the prevailing market complacency.
The U.S. dollar index remained relatively stable for the day but was poised for a modest weekly gain . The euro and sterling remained subdued , .
Data on U.S. personal consumption expenditures (PCE) price index revealed a 0.3% increase last month, aligning with economists' forecasts and indicative of ongoing disinflation trends.
Responding to the data, David Alcaly, lead macroeconomic strategist at Lazard Asset Management, emphasized the persistence of disinflation trends and downplayed concerns about recent market volatility, attributing it more to potential inflationary shifts like tariffs rather than current economic conditions.
Additionally, the report highlighted a surge in consumer spending that briefly lifted 10-year Treasury yields before stabilizing at 4.525% .
Yields, which exhibit an inverse relationship with prices, are projected to decline by more than 10 basis points over the week, largely influenced by investor activity following the tech stock downturn on Monday.
A report on Thursday indicated solid U.S. economic growth in the fourth quarter, reinforcing expectations for the Federal Reserve to implement gradual interest rate adjustments this year.
German bond yields experienced a second-day decrease following below-par data. The European Central Bank signaled on Thursday that further easing measures were forthcoming.
Brent crude oil futures remained steady at $76.86 per barrel.