European markets are expected to commence trading positively on Tuesday, with investor focus shifting towards technology company earnings and upcoming central bank meetings.
Prominent chip-machine manufacturer ASML, along with Meta Platforms and Microsoft, are set to release their quarterly earnings and guidance updates on Wednesday. This will be followed by announcements from Apple and IBM on Thursday. Meanwhile, the U.S. Federal Reserve is largely anticipated to maintain current interest rates on Wednesday. However, market participants will closely scrutinize the accompanying statement for any indications regarding future rate direction.
For the Federal Reserve to consider further easing, evidence of economic weakness and more moderate inflation figures is necessary.
The majority of economists predict that the U.S. central bank will begin rate cuts in the first half of the upcoming year.
The European Central Bank (ECB) is scheduled to meet on Thursday, with market speculation fully incorporating another rate cut into their expectations.
Analysts project that the ECB will continue its rate-reduction path into 2025, likely implementing moderate cuts of 0.25 percentage points at each of the four monetary policy meetings in the first half of the year.
Later in the day, attention may turn to France's consumer confidence survey results, along with U.S. data on consumer confidence and durable goods orders.
In Asian market activity, there was a general downturn, with markets in China and South Korea closed due to Lunar New Year celebrations.
Japanese technology stocks extended their decline, spurred by concerns about potentially overvalued tech valuations following the introduction of a low-cost Chinese AI model.
The U.S. dollar saw gains and Treasury yields rose after President Donald Trump signaled a move towards higher universal tariffs. He announced intentions to impose tariffs on imported semiconductors, pharmaceuticals, and certain metals to boost domestic production.
In a significant development, the Financial Times reported that Scott Bessent has been confirmed as the new Treasury Secretary under President Trump, who has supported the idea of gradual universal levies.
In commodity markets, gold prices stabilized in Asian trading, while oil prices saw a modest increase after experiencing a 2 percent decline on Monday.
In the U.S., stock markets concluded lower, with technology shares facing substantial selling pressure. This was attributed to DeepSeek's technological advancements casting doubt on the high spending by Silicon Valley on AI and the ongoing viability of the U.S. technological lead in artificial intelligence.
The Nasdaq Composite tumbled by 3.1 percent, while the Dow Jones slipped by 0.7 percent and the S&P 500 decreased by 1.5 percent.
In Europe, stocks closed largely unchanged on Monday, as advances in defensive stocks counterbalanced declines in the technology sector.
The pan-European STOXX 600 finished with a slight downward tendency. Germany's DAX fell by 0.5 percent, France's CAC 40 slipped 0.3 percent, while the U.K.'s FTSE 100 ended slightly higher.