The emergence of Chinese AI startup DeepSeek has prompted a reevaluation of tech stock valuations, leading to a significant selloff in Nasdaq futures and European tech stocks. This shift in sentiment has bolstered demand for safe-haven assets, with the Japanese yen and Swiss franc seeing notable gains. Meanwhile, global government bonds, including US Treasuries, have rallied, resulting in a decline in yields as investors seek safety amidst heightened market volatility.
Increased trade uncertainty, particularly following US President Trump's announcement and subsequent retraction of tariffs on Colombia, has further dampened risk sentiment. This has negatively impacted risk-sensitive currencies like the Mexican peso, which fell by 1%. In contrast, oil prices have advanced, with West Texas Intermediate (WTI) crude rising as it is often perceived as a hedge against geopolitical risks.
As of 05:41 on January 27, WTI crude is trading at $75.12, up from its last close of $74.66. The rise in oil prices comes amid broader market uncertainty, with investors navigating a complex landscape of geopolitical and economic factors.