World stock markets pushed higher on Tuesday as a wave of encouraging U.S. earnings reports lifted investor sentiment, while the U.S. dollar plunged to multi-year lows and safe-haven assets gained amid geopolitical and policy concerns.
The benchmark S&P 500 closed near the 7000-point mark, and a number of regional markets also hit fresh highs. South Korea rose about 3% to a new peak, and Brazil registered record levels as well.
Sector and single-stock action
Within the S&P 500, nine sectors ended the day higher, with technology and utilities among the leading gainers. Two sectors posted declines - healthcare and energy. On the individual-stock front, General Motors advanced roughly 9%, while UnitedHealth Group fell about 20%.
Foreign exchange - broad dollar weakness
The U.S. dollar came under heavy selling pressure, extending a run of declines to reach four-year lows on a broad basis. Traders attributed the selling to a mixture of worries: geopolitics, uncertainty around U.S. policy direction under President Donald Trump, the impression that Washington would prefer a lower exchange rate, and concerns over the independence of the Federal Reserve. The market dynamics reflect a renewed "Sell America" trade in FX, mirroring patterns seen last year, where U.S. equities climb even as the dollar weakens and Treasuries remain relatively steady.
Short-term technicals and momentum indicators were described as unfavorable for the dollar, and on a longer-term, broad real effective exchange rate basis the dollar still looked expensive.
Safe-haven currencies and the yen
With the dollar falling and the Japanese yen facing domestic policy uncertainty and a tumbling bond market, the Swiss franc appreciated sharply. On Tuesday, the euro/Swiss exchange rate fell to 0.9163 francs - the lowest level since January 15, 2015, the day when the Swiss National Bank ended its exchange rate cap and the franc jumped as much as 30%. Excluding that day, the franc has not been stronger against the euro in the observed period. The Swiss franc also reached an 11-year high versus the dollar. Meanwhile, sterling - referred to in FX markets as cable - traded at four-year highs against the dollar, and the yen drifted toward the 152-per-dollar level.
Bonds
U.S. Treasury yields moved higher at the long end of the curve, rising about 4 basis points and causing a modest steepening of the yield curve.
Commodities and metals
Oil prices climbed roughly 3% on the day. Precious metals presented a mixed picture: gold and silver staged a rebound, while platinum and palladium slipped between 3% and 5%.
How markets are interpreting the divergence
Equity markets continued to race to new highs despite pronounced volatility in currency and metals markets. Strong corporate earnings, ongoing growth signals, and investor confidence in the artificial intelligence-driven economic opportunity have supported equities. That said, the persistence of sharp dollar declines raises questions about sustainability. If the dollar slide coincides with selloffs in the bond market, equity investors could become more uneasy.
Selected recommended reads
For readers seeking additional context on the day's market moves, the following pieces were highlighted as timely background:
- U.S. consumer confidence dives to a more than 11-1/2-year low
- World’s 'middle powers' de-risking from America: Mike Dolan
- India, EU reach landmark trade deal, tariffs to be slashed on most goods
- In the Market: Wall Street’s banking on next Fed chair to stand up to Trump
- Chinese industrial profit rises in 2025, first time in four years
Looking ahead - events that could move markets tomorrow
- Australia inflation (December, Q4)
- ECB Board Member Isabel Schnabel speaks
- Brazil interest rate decision
- Canada interest rate decision
- U.S. Treasury auctions $30 billion of 2-year FRNs
- U.S. earnings, including Microsoft, Meta, Tesla, IBM, AT&T, Starbucks
- U.S. Federal Reserve interest rate decision
Conclusion
Tuesday’s session underscored a sharp bifurcation across markets: equities climbed to new highs on corporate strength and growth optimism, while the currency and precious metals markets signalled investor risk aversion tied to policy uncertainty and geopolitical concerns. The durability of the current equity rally may hinge on whether currency and bond market stresses intensify or stabilize in the near term.