Market Tensions Mount Amid Tariff Talks and Major Earnings Releases

Calmer sentiments emerge following DeepSeek’s AI sell-off, with Asian markets cautiously rallying as upcoming key earnings and policy decisions loom. Trump’s tariff decisions add uncertainty amid Lunar New Year celebrations, impacting dollar movements. Expected Fed stance and ECB’s likely rate cuts highlight monetary dynamics influencing European markets.

Calmer market sentiments emerge as the panic from DeepSeek's AI-related sell-off subsides, encouraging an overnight rally reaching Asian markets open during the Lunar New Year holidays. Investors now seem less concerned about the startup AI assistant affecting Nvidia valuations, with eyes on upcoming earnings from major tech firms.

Japan's Nikkei is up 0.5%, potentially ending a three-day downturn, while Australia marks a 0.9% gain boosted by easing inflation, fueling hopes for a Reserve Bank rate cut. However, global markets remain cautious, anticipating major Wall Street earnings and central bank decisions today and the day after.

The uncertain tariff stance of President Trump with China, despite assurance of duties on Canada and Mexico, clouds fiscal outlooks. The dollar shows fluctuating trends correlating with tariff talk shifts, with traders expecting steady Fed policy against backdrop of potential significant ECB rate cuts tomorrow.

(With inputs from agencies.)