Markets Daily: Buying the dip

Donald Trump's renewed pledges to slap 25% tariffs on Canadian and Mexican imports jolted currency markets. He's poised to unleash the first

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Markets Snapshot S&P 500 Futures 6,125 +0.42% Nasdaq 100 Futures 21,783.75 +0.74% US 10-Year Treasury Yield 4.533% +0.016 Gold 2,793.31 -0.05% Bitcoin 104,299.44 -0.72% Market data as of 05:48 am EST. View or Create your Watchlist Market data may be delayed depending on provider agreements.

Five things you need to know

Donald Trump's renewed pledges to slap 25% tariffs on Canadian and Mexican imports jolted currency markets. He's poised to unleash the first wave of levies tomorrow, with possible ripple effects on commodity prices.  Apple gave a reassuring revenue forecast, boosting shares of the world's most valuable company by 3.4% this morning after its holiday results showed jarring declines for China and the iPhone.  Intel's quarterly revenue beat estimates, though the chipmaker cautioned that its push to become more competitive is still a work in progress. The stock is up about 2% in premarket trading. European stocks are set for their biggest monthly gain in two years, while US stock futures are rising after the strong earnings from Apple and Intel. The dollar is headed for its best week since mid-November on Trump's threatened tariffs. US officials are probing whether Chinese AI startup DeepSeek bought advanced Nvidia semiconductors through third parties in Singapore, circumventing US restrictions on sales of chips used for AI tasks.

Keeping the faith

Dip buyers in the world of exchange-traded funds are keeping the faith, brushing off AI-related fears that battered markets from New York to Tokyo at the start of the week. The insatiable buying demand is on full display in famous funds like QQQ, the biggest ETF tracking the Nasdaq 100. Even as the tech-heavy gauge fell nearly 3% Monday, QQQ notched its biggest one-day inflow since 2021 with more than $4.3 billion. A triple-leveraged semiconductor ETF known as SOXL also witnessed the biggest daily intake in at least five months. Retail speculators are still Nvidia uber-bulls, too, judging by a gush of flows to NVDL -- a product that amps up gains in the famous stock. At $1 billion, it got its biggest one-day inflow on record Monday, despite tumbling an unprecedented 34% on fears that Chinese upstart DeepSeek could upend America's dominance in the artificial-intelligence race. Flows into these derivatives-powered funds "show that retail investors seem to want more leveraged exposure, not less, after Monday's selloff," said Rocky Fishman of research firm Asym 500. In the latest Bloomberg Markets Live Pulse survey, 88% said the debut of DeepSeek's latest model will have little to no impact on the shares of the US technology behemoths in coming weeks.  Momentum-chasing day traders are also scooping up financials and consumer-discretionary ETFs, in a sign of confidence about the US economic expansion, with this week's GDP data only adding to the bull case. Yet the market whiplash may not be over this week. The Fed's favored inflation gauge, the PCE, is due this morning. It's expected to show a small acceleration at 2.5% from a year earlier, up from 2.4% in the previous month, according to the median forecast of economists surveyed by Bloomberg. With tech valuations elevated, any surprise that stokes Wall Street's interest-rate fears has the potential to stir up fresh turbulence — and a fresh dash for lower-valued assets. "We continue to see value in diversification across strategies and regions as well as in downside protection," Goldman Sachs analysts wrote in a note. "We caution that US equities are vulnerable to further disappointments." —Isabelle Lee

On the move

Walgreens Boots shares drop as much as 13% in premarket trading. The pharmacy chain is suspending the dividend it's paid for the past 92 years in a bid to conserve cash as it attempts to revive the business. Deckers Outdoor shares are slumping 15%. The footwear and apparel maker's revenue forecast fell short of Wall Street expectations.  Cipher Mining shares jump as much as 26%. The bitcoin mining company announced a $50 million PIPE investment from SoftBank that will support the high-performance computing business. Exxon Mobil and Chevron are two of the biggest companies reporting earnings today. Each stock has returned about 10% over the past year, a respectable showing but far below the S&P 500's tech-fueled 27% return. Drugmaker AbbVie also is on the schedule for today. —Subrat Patnaik

Europe's moment to shine

Contrarians who've been urging investors to trim their holdings in pricey US stocks in favor of cheaper European shares are feeling vindicated today. The Stoxx Europe 600 Index is finishing January up about 6.6%, its biggest monthly gain in two years, while the S&P 500 is up 3.2%. European shares are benefiting from solid earnings and speculation the region will be spared from immediate US tariffs. Value hunters have long touted Europe as a place to find bargains, but it's been a tough sell. The region lacks innovative tech giants, and it's been overshadowed by China as the world's factory. Both of those failings now seem like attributes, given the risk that DeepSeek's AI model poses to tech valuations and the prospect that China is about to get whacked by Trump's tariffs. Plus, the European Central Bank is still cutting interest rates, raising the promise of a pickup in economic growth. "Investors seem optimistic about the economic cycle and the DeepSeek scare may slow down capital flows towards big US tech at the advantage of Europe," said Thomas Brenier, head of equities at Lazard Freres Gestion. Exposure to US stocks is elevated after the market drew record inflows in January, says Michael Hartnett at Bank of America. That presents a risk at a time when inflation is likely to return as a result of Trump's protectionist policies, he says. He's suggesting investors look at bank stocks in Europe and Japan. US exceptionalism is now "exceptionally expensive, exceptionally well-owned," the strategist wrote in a note. We can hear the Europe skeptics now: The DeepSeek threat to US tech is overblown (see the Markets Live Pulse survey cited above), Europe may get its own turn in the barrel when it comes to tariffs, and economic growth in the region has a long history of falling short of expectations. Plus, the governments of Germany and France — the European Union's economic engines —  are a mess. The question is, how much of that is priced in? Europe bulls are betting that the Stoxx 600 at 14 times estimated earnings is indeed the bargain it seems to be compared to the 22 multiple for the S&P 500. —Phil Serafino

`Hopes and dreams'

Tesla's results this week drove home the lesson that earnings don't seem to matter for this stock anymore. Instead, it's Elon Musk's narrative that's wooing investors. The EV maker's fourth-quarter earnings fell short of analysts' expectations pretty much across the board. Even its sales growth outlook for 2025 was dialed back. Yet, the stock gained 2.9% Thursday, as investors focused on Musk's upbeat tone on the robotaxi business, humanoid robots and artificial intelligence.  That's an unusual reaction from equity investors, especially after they bid up the stock ahead of the report by nearly 80% since late October. Tesla is now valued at 127 times forward earnings, compared to the 31 times average multiple for the biggest seven tech stocks.   "The earnings were terrible, but this company is now all hopes and dreams for Musk's vision of autonomous driving and robotaxi," said Thomas Thornton, founder at Hedge Fund Telemetry. "This is a market where fundamentals don't matter anymore.'' — Esha Dey

Word from Wall Street "When you get paid in restricted stock, it's like being handed a scratch-off ticket that takes three to five years to scratch." Craig Coben Retired capital markets executive, Bank of America Click here to read more about banker bonuses

One number to start your day... $2,800  That's the latest record in gold prices, driven by demand for safe assets amid Trump's tariff threats.

What else we're reading

'Big short' traders reuniting for hedge-fund week are going long ECB and Fed policy split sets up the euro for a deeper decline Morgan Stanley rides Musk-Trump bromance to X debt redemption OpenAI in talks for new funding at up to $300 billion valuation Novo Nordisk shares still have a long road back from 40% slump Japan's economy faces fallout from Trump's China tariff threats

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