Global Stocks Consolidate in Holiday-Thinned Trade as Europe Advances and Dollar Edges Higher

Overview

• Trading volumes stayed light with major Asian markets still closed for Lunar New Year and the U.S. just reopening, while the dollar index extended a modest three‑day rise and the euro wobbled after an FT report on a possible early Lagarde exit that the ECB said had no decision behind it.
• Japan’s weaker‑than‑expected fourth‑quarter GDP reinforced pressure for fiscal support and saw markets price only a small chance of a BoJ hike in March, with economists increasingly expecting any tightening to slip to later in the year.
• Tokyo’s Nikkei rose 1.02% after the U.S. announced three projects totaling $36 billion to be financed by Japan under a broader $550 billion investment commitment, lifting shares tied to the initiatives such as Mitsubishi Electric, Noritake and Asahi Diamond.
• European equities logged firm gains on Tuesday, helped by a better‑than‑usual earnings beat rate and signs of diplomatic movement involving the U.S. and Iran as well as Russia and Ukraine, with banks outperforming and Bayer jumping on news of proposed Monsanto litigation settlements.
• U.S. stocks finished little changed after the long weekend as ongoing uncertainty over AI’s profit impact restrained a fuller rebound and Federal Reserve officials signaled caution ahead of minutes due later in the day.