Market snapshot: calm and relief prevail 

A sense of calm descended after the precious metals ructions, opening the door for investors to buy on the dip.

Technical and sentiment driven declines found a floor, which drove a return to a risk-on approach. After all, despite the dip in the gold price, the commodity remains up by 14% this year and by 87% over the last 12 months, which suggests a healthy correction was overdue without necessarily indicating a fundamental change.

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US markets found their feet after a weak opening, with all of the main indices finishing ahead in a session propelled by a strong manufacturing print and the continuation of what has generally been a successful reporting season so far. An estimated 80% of companies have beaten expectations with a third of the S&P500 constituents having reported so far.

That being said, the season has not been without its casualties, most notably Microsoft Corp (NASDAQ:MSFT) last week. The Walt Disney Co (NYSE:DIS) shares fell by more than 7% despite exceeding estimates as it warned of headwinds resulting from international travellers avoiding its domestic theme parks. 

NVIDIA Corp (NASDAQ:NVDA) shares also dipped by almost 3% as reports circulated that it was considering refraining from a $100 billion investment into OpenAI, with its next earnings report due towards the end of the month. More positively, software group Palantir Technologies Inc Ordinary Shares - Class A (NASDAQ:PLTR) saw its shares rise by more than 7% in trading after the bell, having reported a 70% spike in revenues for the latest quarter.

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The breathless start to February will now be missing one key data point this week, however, with news that the non-farm payrolls number which had been due on Friday will be rescheduled until resolution is found to the partial government shutdown currently in place.

In the meantime, the positive direction has been re-established for the moment with gains of 2.8%, 1.9% and 1.5% for the Dow Jones, S&P500 and Nasdaq respectively in the year to date, while the smaller cap Russell 2000 index continues to lead the way with a 5.3% hike.

Asian markets were also lifted by the general relief rally, with technology-related shares reaping the benefit of renewed buying interest. However, some caution remains as investors await some key corporate earnings which should reveal the impact of the US tariffs imposed so far across the region, while the possibility of curbs on rare earths from China also casts a shadow.

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The FTSE100 opened positively, building on the record closing high set yesterday. The gains once more displayed the idiosyncratic strength of the index, which enabled more defensive stocks to triumph over the weakness of resource stocks. In addition, the nascent recovery of the US dollar was a further tailwind, given the estimated 70% exposure of stocks in the index to overseas economies and the US in particular, meaning that profits become more profitable for those companies on repatriation.

JD Sports Fashion (LSE:JD.) weighed as its shares suffered following a downgrade from two brokers, while AstraZeneca (LSE:AZN)’s new relationship with the US given the start of its dual listing was marred by news that the US Food and Drug Administration (FDA) had rejected an initial submission of its lupus drug. 

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Nonetheless, the declines were comfortably offset by a strong rebound in resource stocks, with Endeavour Mining (LSE:EDV) and Fresnillo (LSE:FRES) resuming their place at the top of the leader board, each seeing a 5% share price spike. The FTSE100 continues to display its attraction as an investment destination on the global stage and is already ahead by 4.4% so far this year as a result.