Big Tech Under Pressure: Amazon Drops on Massive AI Spend Plans

EUR/USD extended its losses on Thursday after the European Central Bank left interest rates unchanged and reiterated a neutral, data-dependent policy stance. A broad risk-off move across global markets supported the US Dollar, outweighing softer-than-expected US labor data that reinforced expectations for Federal Reserve rate cuts.

As expected, the ECB kept policy rates unchanged and reaffirmed that it is not pre-committed to a specific rate path, stressing that future decisions will be made on a meeting-by-meeting basis. Speaking at the post-meeting press conference, ECB President Christine Lagarde struck a neutral tone, stating that monetary policy is “in a good place.”

The lack of new guidance offered little support for the Euro, particularly as broader market sentiment turned defensive.

At the same time, US labor data pointed to a cooling job market. Private employers continued to scale back hiring, while initial jobless claims rose to 231,000, exceeding expectations of 212,000. The Challenger report showed that US employers announced 108,435 job cuts, with Amazon, UPS, and Dow accounting for nearly half of the total.

In Europe, markets will focus on speeches from ECB policymakers Cipollone and Kocher. In the US, attention will turn to the University of Michigan Consumer Sentiment survey and remarks from Federal Reserve Vice Chair Philip Jefferson, both of which could influence near-term market direction.

Gold prices rebounded early on Friday after slipping to a four-day low near $4,655 during the Asian session, although the recovery lacked strong follow-through. A deterioration in global risk sentiment, reflected in broad losses across equity markets, revived demand for safe-haven assets and provided support for the precious metal.

Expectations for additional US Federal Reserve rate cuts in 2026, reinforced by signs of cooling in the US labor market, also underpinned demand for the non-yielding metal. These factors helped gold reverse early losses despite lingering headwinds from a firm US Dollar.

Geopolitical uncertainty remained elevated after the White House reiterated that diplomacy remains President Donald Trump’s preferred approach in dealing with Iran, while noting that military options remain on the table. The ongoing tensions helped sustain safe-haven flows into gold.

However, upside momentum was limited as the US Dollar held onto its recent recovery gains from a four-year low. Market participants also weighed expectations that incoming Fed Chair Kevin Warsh could adopt a less dovish policy stance, tempering enthusiasm for aggressive bullish positions in XAU/USD.

During the North American session, attention will turn to the preliminary University of Michigan Consumer Sentiment Index and inflation expectations, alongside remarks from key Federal Open Market Committee members. These releases are likely to influence US Dollar dynamics and near-term direction for gold prices.

Oil prices settled sharply lower on Thursday after the United States and Iran agreed to hold talks in Oman on Friday, easing immediate concerns over potential disruptions to Iranian crude supplies. Prices were volatile throughout the session as traders weighed diplomatic developments against broader geopolitical risks.

Market participants remain cautious about the prospects for a lasting agreement. The planned discussions come as the US continues to bolster its military presence in the Middle East, while regional powers attempt to avoid a confrontation that could escalate into a broader conflict.

Roughly 20% of global oil consumption flows through the Strait of Hormuz, a critical shipping route between Oman and Iran. Key OPEC producers—including Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq—export the majority of their crude through the strait, underscoring the region’s importance to global energy markets.

Broader commodity markets were also pressured by a stronger US Dollar and sharp swings in precious metals, weighing on overall risk sentiment during the session.

On the supply side, discounts on Russian crude shipments to China widened to record levels this week, as sellers cut prices to maintain demand from the world’s largest oil importer amid the likely loss of Indian buyers. The shift follows a newly announced trade agreement between the United States and India, under which India agreed to halt purchases of Russian oil.

Major US equity indices closed sharply lower on Thursday as a broad risk-off tone swept through financial markets, weighing on equities alongside declines in metals and Bitcoin. Weak labor market data and continued pressure on technology stocks compounded the negative sentiment.

Technology shares remained under pressure as investors continued to rotate out of high-valuation names. Losses accelerated following disappointing earnings-related developments at several major companies.

Alphabet shares ended modestly lower after the company unveiled capital expenditure plans of up to $185 billion in 2026, far exceeding market expectations. While the company reported strong fourth-quarter and full-year results, investor concerns lingered over the pace of AI-related spending and the timing of potential returns.

Qualcomm posted steeper losses, tumbling 8.39% after issuing weaker-than-expected guidance for the current quarter. The chipmaker cited a global memory chip shortage, which is expected to weigh on smartphone sales and broader device demand. Market participants also remained cautious ahead of earnings from Amazon, viewed as a key test for the technology trade.

Economic data pressured markets as US job cuts surged to their highest January level since 2009, underscoring signs of labor market weakening despite solid economic growth. Jobless claims rose above expectations, job openings declined sharply, and policy uncertainty increased after reports that the Trump administration expanded presidential authority over the federal workforce.