The Japan Times - Stock markets gain at end of turbulent week

AI-related stocks, particularly chip-maker Nvidia, had slumped earlier in the week after China's DeepSeek unveiled an artificial intelligence model to rival those of US tech giants.

But markets have clawed back most of those losses thanks to positive earnings and company strategy updates, and as some investors reevaluated the risks US firms face from Chinese competition.

"Monday's sell-off was likely an overreaction, as markets tend to 'shoot first and ask questions later'," said Daniela Sabin Hathorn, senior market analyst at Capital.com.

"Big US tech stocks still maintain significant competitive advantages that will make them difficult to disrupt overnight," she said.

Financial markets also digested the latest US inflation reading.

Data showed the Federal Reserve's favourite inflation gauge, the Personal Consumption Expenditures index, accelerated for a third month in a row, reaching 2.6 percent in December as expected.

"While there's still further progress to be made on inflation, investors can breathe a sigh of relief and refocus on the market's more notable fundamentals, like earnings growth and the economy," said Bret Kenwell, US investment analyst at eToro trading platform.

Wall Street's three main indexes were all higher in morning trading, though the wider S&P 500 and the tech-heavy Nasdaq were still down slightly from the start of the week.

Apple shares were up almost three percent after the tech titan reported the day before that its profit and revenue grew strongly, even if iPhone sales did not rise as fast as analysts' expectations.

London's benchmark FTSE 100 hit fresh highs, helped by an almost 12-percent jump in the share price of Smiths Group after the British engineering company said it planned to simplify the business and return substantial sums to shareholders.

Paris and Frankfurt also rose.

Data showed German inflation unexpectedly slowed in January, the first decline in months, bolstering the case for further rate cuts by the European Central Bank.

Investors, however, are also bracing for tariffs that US President Donald Trump has vowed to impose on imports from Canada and Mexico this weekend.

Concerns over Trump's trade manoeuvres pushed gold to fresh record highs above $2,800 an ounce.

"The gold price is proving its haven credentials, as investors choose it to hedge fears about Trump's tariff threats," said Kathleen Brooks, research director at XTB, even if the actual details of the potential tariffs are unclear.

The dollar rose against the British pound, euro and yen.

The US currency was supported by the Fed indicating this week that it did not see a need to cut interest rates further while the country's inflation remains elevated.

The ECB cut rates on Thursday, the fifth reduction since June.

Next week, the Bank of England is widely forecast to trim its main interest rate, as the UK struggles to grow its economy.

The greenback weighed even more so on the Mexican peso and Canadian dollar with Trump saying he would go ahead with the threatened 25 percent tariffs on the countries pencilled in for Saturday.

- Key figures around 1440 GMT -

New York - Dow: UP 0.3 percent at 45,008.24 points

New York - S&P 500: UP 0.4 percent at 6,096.97

New York - Nsdaq Composite: UP 0.8 percent at 19,842.15

London - FTSE 100: UP 0.4 percent at 8,679.00

Paris - CAC 40: UP 0.3 percent at 7,962.59

Frankfurt - DAX: UP 0.2 percent at 21,766.15

Tokyo - Nikkei 225: UP 0.2 percent at 39,572.49 (close)

Hong Kong - Hang Seng Index: Closed for a holiday

Shanghai - Composite: Closed for a holiday

Euro/dollar: DOWN at $1.0373 from $1.0392 on Thursday

Pound/dollar: DOWN at $1.2394 from $1.2420

Dollar/yen: UP at 154.89 yen from 154.38 yen

Euro/pound: UP at 83.69 pence from 83.67 pence

West Texas Intermediate: FLAT at $72.73 per barrel

Brent North Sea Crude: FLAT at $75.87 per barrel

T.Maeda--JT