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

AI-related stocks, particularly key chipmaker Nvidia, had plunged early in the week after China's DeepSeek unveiled an artificial intelligence model rivalling those of US tech giants but developed at a small fraction of the cost.

But markets have clawed back most of those losses thanks to encouraging earnings and company strategy updates, and as some investors re-evaluated 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 data, with the Federal Reserve's favourite inflation gauge, the Personal Consumption Expenditures index, accelerating 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 the eToro trading platform.

The Dow was little changed near midday Friday, while the wider S&P 500 and the tech-heavy Nasdaq were both higher.

Apple shares climbed about three percent at the opening and were last up about one percent after the tech titan reported that 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 surge in the share price of Smiths Group after the British engineering company said it planned to streamline its business and return substantial sums to shareholders.

But Paris and Frankfurt ended little changed as early rises fizzled. European stocks had one of their best months in two years in January with Europe-wide indexes rising six percent since the start of the year.

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

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

But investors 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 tactics pushed gold to new records 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 details of the potential tariffs are unclear.

The dollar held on to recent gains against the pound, euro and yen, 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.

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

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

- Key figures around 1640 GMT -

New York - Dow: DOWN 0.1 percent at 44,861.74 points

New York - S&P 500: UP 0.7 percent at 6,110.56

New York - Nasdaq Composite: UP 1.2 percent at 19,918.00

London - FTSE 100: UP 0.3 percent at 8,673.96 (close)

Paris - CAC 40: UP 0.1 percent at 7,950.17 (close)

Frankfurt - DAX: UNCHANGED at 21,732.05 (close)

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: UP at $1.0396 from $1.0392 on Thursday

Pound/dollar: DOWN at $1.2432 from $1.2420

Dollar/yen: UP at 154.91 yen from 154.38 yen

Euro/pound: DOWN at 83.63 pence from 83.67 pence

West Texas Intermediate: FLAT at $72.71 per barrel

Brent North Sea Crude: FLAT at $75.86 per barrel

K.Nakajima--JT