Indonesian equities plunged further into turmoil on Thursday after a warning from MSCI Inc. over a possible market downgrade triggered the worst two-day selloff in almost three decades, rattling investor confidence across equities and currency markets.

The benchmark Jakarta Composite Index tumbled as much as 10%, after earlier triggering a 30-minute trading halt.

At the time of writing, the index was trading down 5.91%.

The move extended losses sparked by MSCI’s caution around market transparency and the limited amount of stock available for trading among listed companies.

Analysts downgraded their views in response, accelerating the decline.

MSCI warning fuels market rout

MSCI’s concerns center on Indonesia’s low free float, with many of the market’s largest companies tightly controlled by a small number of wealthy shareholders.

Investors argue that this structure distorts index representation and raises the risk of manipulation.

Following the warning, Goldman Sachs Group Inc. and UBS AG both cut their recommendations on Indonesian equities.

Goldman warned that more than $13 billion in outflows could be triggered in an extreme scenario if MSCI were to downgrade the market.

“The market needs a clearer plan from the regulators on what they’re going to do to reach a consensus with MSCI, and the plan must be communicated regularly so investors can keep track of it,” said Aldo Perkasa, head of research at PT Trimegah Sekuritas Indonesia in a Bloomberg report, adding the selloff showed that official explanations so far had failed to reassure investors.

Currency pressure and policy concerns

The turmoil spilled into foreign exchange markets, with the rupiah weakening as much as 0.5% against the dollar, its steepest fall since October and underperforming regional peers.

Exchange rules state that a further 30-minute trading halt would be triggered at a 15% decline.

If losses are sustained, Indonesian equities could enter a technical bear market.

The selloff has intensified scrutiny of Indonesia’s financial markets, once viewed as a flagship of the country’s economic rise.

Confidence has been shaken by an ambitious school lunch program that risks straining public finances, the abrupt departure of former finance minister Sri Mulyani Indrawati last year, and a widening fiscal deficit.

Foreign investors had already turned cautious before this week’s rout.

Net foreign selling totaled $192 million in the week ended Jan. 23, the first outflow in 16 weeks.

On Wednesday alone, overseas investors sold a net 6.2 trillion rupiah ($371 million) of shares, the most since April.

Free-float reforms under scrutiny

Regulators have pledged to improve transparency ahead of MSCI’s next review in May, when the index provider will reassess Indonesia’s market accessibility.

Failure to show progress could lead to a reduced weighting or even a downgrade from emerging market status.

Indonesia currently has the lowest free float among major Asia-Pacific markets at 7.5%.

Authorities aim to raise that to 10–15%, with a longer-term target of 25%, though no timeline has been set.

That compares with 25% thresholds in Hong Kong and India, and 15% in Thailand.

The latest selloff follows months of consultation after MSCI proposed tightening its definition of free float last year.

The firm considered using data from Indonesia Central Securities Depository, but said investors raised “significant concerns” about relying on that dataset.

“Based on what’s been disclosed so far, the discussion around KSEI has mainly been about concerns over aspects of its data methodology, but there hasn’t been enough detail to draw firm conclusions yet,” said Sufianti, a strategist at Bloomberg Intelligence.

“So for now, it’s very much a wait-and-see in terms of what actions might follow.”

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On Thursday, global markets and geopolitics were shaped by a mix of accelerating artificial intelligence investment, volatile Asian equities, renewed UK-China diplomacy, and a powerful rally in commodities.

OpenAI funding signals acceleration in AI arms race

OpenAI, the creator of ChatGPT, is on track to raise tens of billions of dollars from existing and new investors, highlighting the pace at which the AI boom is intensifying.

According to reporting by The Information, the company could raise as much as $100 billion in the coming weeks.

Existing backers are expected to play a central role.

NVIDIA plans to invest up to $30 billion, drawing on the gains it has made during the AI-led surge in chip demand.

Microsoft, which spearheaded OpenAI’s early funding, is set to contribute about $10 billion, while Amazon is expected to invest between $10 billion and $20 billion.

Amazon’s investment is structured differently, with commitments tied to OpenAI using Amazon’s chips and cloud services for about seven years.

At the same time, SoftBank, led by Masayoshi Son, is planning to invest $60 billion, a year after providing more than $40 billion in financing.

Middle Eastern investors could add as much as $50 billion.

The funding would support OpenAI’s rising cash burn, estimated at $9 billion in 2025, and help finance major infrastructure deals with companies including Broadcom, Oracle, and CoreWeave.

The company is also preparing for a potential IPO this year or next, possibly after gauging investor appetite through the anticipated listing of Anthropic.

Asian markets jittery as AI capex collides with policy risk

Asian equities showed mixed performance.

South Korean stocks surged, with the Kospi up 1.09% on the day and 23% for January, while Taiwan’s market has gained nearly 13% this month.

Japan’s Nikkei edged higher, held back by currency volatility and rising bond yields.

Indonesia stood out on the downside. The Jakarta Composite Index suffered a second session of sharp losses after MSCI Inc. warned about ownership concentration and trading transparency.

Goldman Sachs cut its rating on Indonesian equities following the warning.

In the US, stock futures were subdued.

Microsoft shares slid 6.5% in extended trading amid concerns that its heavy AI-related capital expenditure may not deliver sufficient returns.

Meta Platforms, by contrast, raised its revenue and capex outlook for 2026, sending its shares up 6% after hours.

“A common theme so far from META and MSFT is the larger-than-expected capex spending, indicating the upward momentum for AI spending,” JPMorgan analysts said.

Starmer seeks reset in UK-China relations

UK Prime Minister Keir Starmer met Chinese President Xi Jinping in Beijing, marking the first visit by a British leader in eight years.

Starmer described engagement with China as a pragmatic choice, calling for a “mature” relationship with the world’s second-largest economy.

“I have long been clear that the UK and China need a long-term, consistent and comprehensive strategic partnership,” Starmer said.

He added that the two sides should “identify opportunities to collaborate, but also allow a meaningful dialogue on areas where we disagree”.

Xi stressed the importance of “dialogue and cooperation” amid a “complex and intertwined” global environment.

Starmer’s three-day trip includes meetings in Beijing and Shanghai and is accompanied by a delegation of nearly 50 UK businesses, including HSBC, British Airways, AstraZeneca, and GSK.

Copper surges as commodities rally broadens

Copper prices jumped to a record as base metals extended a strong start to 2026.

Three-month copper futures on the London Metal Exchange rose as much as 6.7% to $13,967 a ton, taking year-to-date gains to 12%.

Aluminum hovered near a four-year high, while zinc climbed almost 3%.

The rally has been fueled by expectations of stronger US growth, rising investment in data centers, robotics, and power infrastructure, and a weaker dollar.

“Under the cycle in which the US maintains interest rate cuts, the expectation for upward movement in copper prices has not changed,” said Chi Kai, chief investment officer at Shanghai Cosine Capital Management Partnership.

The surge in metals underscores how AI-driven investment, macro policy shifts, and geopolitics are increasingly intersecting across global markets.

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Gold prices continued to surge to new record highs as the yellow metal cleared $5,600 per ounce on Thursday. 

Gold had surged past the $5,000 threshold for the first time this Monday, marking a weekly gain of over 10%. 

This rally is attributed to a combination of strong factors: robust safe-haven investment, persistent central bank purchases, and a depreciation of the dollar.

The strength persisted into early-morning trading in Asia, driving gold on COMEX to a new peak of $5,625.89 per ounce at one point.

Prices were currently just shy of $5,600 an ounce. 

Experts and brokerages had raised their forecast for gold, with many expecting the metal to hit $6,000 by the end of this year.

However, the way prices have been behaving, one would not be surprised if that ceiling were breached sooner. 

“Geopolitical tensions, a weaker dollar, and investor rotation out of currencies have boosted the precious metal,” Ewa Manthey, commodities strategist at ING Group, said in a note. 

Silver has seen a gain of nearly 65%, significantly outperforming gold, which is up approximately 27% year-to-date.

Unperturbed by Fed’s hawkish tone

“Meanwhile, the non-yielding Gold seems rather unaffected by US Federal Reserve (Fed) Chair Jerome Powell’s hawkish remarks on Wednesday that followed the highly anticipated decision to leave interest rates unchanged,” Haresh Menghani, editor at FXStreet, said in a report. 

Even the underlying bullish tone – as depicted by a generally positive sentiment around the equity markets – does little to hinder the bullion’s strong positive momentum.

As expected, the US Federal Reserve maintained its current interest rates following its two-day meeting that concluded on Wednesday. 

However, the decision was not unanimous, as two Fed Governors, Stephen Miran and Christopher Waller, dissented, advocating instead for a 25 basis-point rate cut.

Despite Fed Chair Jerome Powell stating in the post-meeting press conference that inflation remains significantly above the 2% target, the subdued market reaction indicated that investors continue to harbor concerns regarding potential threats to the Fed’s independence.

The independence of monetary policy formulation is currently a key concern, highlighted by both a Department of Justice criminal investigation into Powell and the ongoing effort to dismiss Fed Governor Lisa Cook.

Traders are currently confident that the Fed will keep interest rates unchanged until at least the end of this quarter, and potentially until Chair Jerome Powell’s term concludes in May. 

Despite this expectation of near-term stability, the market is still anticipating two additional rate cuts in 2026.

Geopolitics provide support

In a development concerning international relations, US President Donald Trump, speaking on Wednesday, called on Iran to negotiate a deal regarding nuclear weapons. 

He issued a warning that if the US were to launch an attack in the future, it would significantly surpass the severity of the strike on Iranian nuclear sites that occurred last year.

In response, Tehran issued a warning, threatening to retaliate against the US, Israel, and their supporters.

Russia’s ongoing aerial campaign against Ukrainian cities and infrastructure included a recent drone strike on a passenger train in northeastern Ukraine, resulting in five fatalities.

“This, along with the emergence of fresh US Dollar selling, assists the safe-haven Gold to prolong the record-setting rally for the ninth straight day and climb to the $5,600 neighborhood during the Asian session on Thursday,” Menghani said. 

Elsewhere, silver prices on COMEX came within a whisker of hitting a record of $120 per ounce on Thursday. 

Prices touched a record peak of $119.450 an ounce earlier in the day, and were currently around $118.5 per ounce. 

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SK Hynix has overtaken Samsung Electronics in operating profit for the first time, marking a shift in South Korea’s semiconductor hierarchy as artificial intelligence reshapes the memory market.

The crossover became clear this week when the two rivals reported earnings on consecutive days.

SK Hynix’s results highlighted how leadership in advanced memory chips tied to AI infrastructure is translating into stronger profitability.

The comparison also shows how a focused strategy around high-bandwidth memory has allowed SK Hynix to move ahead of a far more diversified competitor at a moment when AI spending is accelerating across data centres and chip supply chains.

Profits tell the story

For the full year, SK Hynix reported a record operating profit of 47.2 trillion won, surpassing Samsung’s 43.6 trillion won.

Samsung remains a much larger group overall, with businesses spanning smartphones, displays, appliances, and contract chip manufacturing.

Within that structure, its memory division generated operating profits of about 24.9 trillion won in 2025.

SK Hynix, by contrast, derives nearly all of its revenue from memory chips.

That narrower focus has amplified the impact of rising demand for specialised products, particularly those used in AI servers.

As a result, gains in advanced memory pricing and volumes have flowed more directly into SK Hynix’s bottom line.

A sharper strategic focus

The latest earnings comparison also reflects how SK Hynix’s strategic positioning has evolved since its acquisition by SK Telecom for about $3 billion in 2012.

Once viewed as a second-tier memory producer, the company has steadily built scale and technical depth in high-value segments.

Its emphasis on advanced memory has become increasingly important as the industry moves beyond conventional DRAM cycles and towards AI-driven workloads.

Samsung’s diversified model provides resilience across economic cycles, but it also means that strong performance in memory does not dominate group earnings in the same way.

In an environment where AI infrastructure spending is becoming a key profit driver, SK Hynix’s concentration has proved advantageous.

High bandwidth memory advantage

At the centre of SK Hynix’s rise is its leadership in high-bandwidth memory, or HBM.

These chips are essential for AI processors and servers, including those supplied to Nvidia.

Industry researchers say SK Hynix has established an early and sustained lead in both the quality and supply of HBM, allowing it to secure a large share of AI-related contracts.

This advantage has held even as Samsung regained the top spot in overall memory revenue rankings in the fourth quarter of 2025.

According to Counterpoint estimates released in December, SK Hynix held a 57% revenue share of the HBM market in the third quarter of last year, compared with Samsung’s 22%.

The gap illustrates how leadership in a fast-growing niche can outweigh broader revenue gains elsewhere.

Rivals close the gap

Competition is intensifying as rivals work to narrow that lead.

Samsung has expanded its HBM sales and has said it remains on track to begin delivering HBM4 products, the sixth generation of the technology, this year.

Analysts tracking the AI supply chain expect Samsung to recover from last year’s quality issues and show a stronger performance with HBM4 tied to new AI processors.

Even so, expectations remain that SK Hynix will retain a dominant position.

Analysts see the HBM4 race largely as a two-player contest between SK Hynix and Samsung, with both ahead of Micron in competitiveness.

While Samsung is expected to make material progress, SK Hynix is forecast to maintain a high market share as demand for AI servers continues to grow.

A local media report on Wednesday said SK Hynix had secured more than two-thirds of HBM supply orders for Nvidia’s next-generation Vera Rubin products.

Beyond HBM, SK Hynix has also edged ahead of Samsung in the broader DRAM market.

DRAM chips are used for temporary data storage across personal computers, servers, and data centres, reinforcing SK Hynix’s position across memory categories most exposed to AI-driven demand.

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India and the European Union signed a long-awaited free trade agreement on Tuesday, billed by officials as the “mother of all deals”, prompting renewed scrutiny of how — or whether — the pact alters Washington’s approach to its own stalled trade negotiations with New Delhi.

The timing of the landmark trade deal, nearly two decades in the making, has been flagged by experts as especially significant.

It comes as India, a long-term US ally, has been hit with merciless tariffs from Washington — 50% on goods imported from India, including 25% in “punitive tariffs” for continuing to buy oil from Russia.

Additionally, in recent days, Trump threatened to impose 10% tariffs on European allies for standing up to him over his planned takeover of Greenland.

Although he later retracted the threat in Davos and said the tariffs were “suspended,” the episode left long-time allies across the Atlantic even more uneasy than before.

Why the India-EU trade deal begs a US question

The aforementioned reasons, experts say, have caused “accelerated” talks between India and the EU in the last few months, with the announcement of the deal capping those talks.

However, more importantly, the US also finds a mention in commentary about the EU–India trade deal, as the country is pursuing its own trade agreement with India, which has been mired in several delays, with multiple informal deadlines having been missed and no clarity whatsoever on when it will materialise.

Against this backdrop, observers were on the lookout for what Trump might have to say after the deal was signed on Tuesday amid much pomp and show.

However, no commentary was forthcoming.

US Treasury Secretary Scott Bessent, however, did attack the India–EU free trade agreement.

Speaking to ABC News, Bessent defended the Trump administration’s decision to slap steep tariffs on Indian goods, linking them directly to India’s energy trade with Moscow.

“We have put 25 per cent tariffs on India for buying Russian oil. Guess what happened last week? The Europeans signed a trade deal with India,” he said.

Bessent pointed out that the Russian oil that goes into India is used to make refined products that are then bought by Europeans, which means “they are financing the war against themselves”.

Between Washington’s tactlessness, Brussels’ pragmatism and Indian agriculture

“Washington is certainly not likely to view this (the deal) very kindly, because the US has been desperately trying to open up markets using force rather than diplomacy, and it has really not succeeded,” Biswajit Dhar, trade economist and former professor at the Jawaharlal Nehru University (JNU) in India, told Invezz.

Dhar added that Trump did not respect the sensitivities of any country, especially India, which has a complex economy, making it impossible to accept some of the conditions that Trump tried to impose.

We all know that agriculture is really the sticking point. Now, contrast that with what the EU did. It also had interests in agriculture in the beginning and wanted market access in agricultural products, but realpolitik really prevailed over everything else, and they allowed India to not offer tariff cuts on agriculture, which is how the whole thing went through..

According to reports, across multiple rounds of trade talks, Indian negotiators have consistently maintained that protecting the farm sector is a non-negotiable priority.

The entry of cheaper imports from countries like the United States — where farms are larger, mechanised and heavily subsidised — could destabilise domestic crop prices and put smaller landholders at significant risk, with 86% of India’s farmers operating on small and marginal holdings of less than two hectares.

India has not included major agricultural commodities in any free trade agreement negotiated thus far.

Can the EU–India trade deal add urgency to US–India trade talks?

There is a mixed bag of expert opinion on whether, with major global powers aligning among themselves while the US is viewed warily, the country would accelerate talks to conclude the India–US BTA.

“The EU–India deal could even light a fire under efforts to conclude a US–India trade deal and help to move negotiations forward on a comprehensive bilateral trade agreement, as US President Donald Trump and Indian Prime Minister Narendra Modi discussed last year,” said Mark Linscott, Atlantic Council nonresident senior fellow on India.

Linscott, however, maintains that while the India–EU agreement may be interpreted as a response to the Trump administration’s tariffs and tariff threats, “there is no reason it should undermine the US trade relationships with either the EU or India”.

Hardeep Singh Puri, India’s minister for petroleum and natural gas, told CNBC on Tuesday that the India–US trade deal was at a “very advanced stage”, even as he admitted he did not know when it would be concluded.

“I’m told by the people who are in it [the negotiations] that it’s at a very advanced stage, and I’m hoping that, sooner rather than later, it will also see the light of day,” he added of the US deal.

Citi analysts said on Wednesday that markets would be “keenly watching immediate repercussions” of the EU–India deal on India–US tariff talks.

There would be hope that those negotiations might be fast-tracked now, though it remains to be seen whether Indian authorities would be in a better position to withstand the higher US tariffs, given the easier access to the large EU market.

However, Dhar seeks to highlight that mere optics might not provide the US with enough fuel to hasten the talks, as the problem lies elsewhere.

Dhar says that by making “exaggerated promises” to his constituencies during the 2024 presidential elections — especially farm lobbies — of opening up the Indian market for US produce, Trump has effectively “boxed himself into a corner”.

“He really can’t move away from his campaign promise.”

In the 2024 presidential election, almost 78% of farming-dependent counties supported Trump, and Dhar has earlier written that US farm lobbies representing corn, soybean and wheat interests have also been strongly lobbying the US government for access to the Indian market.

“So, in terms of negotiating with India, agreeing to allow it to maintain higher tariffs on agriculture and deciding to revisit it at a later stage is not possible given the kind of dynamics that he himself has set in motion. So I don’t see how the situation is going to change,” he said.

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Deutsche Bank reported record profits in the fourth quarter of 2025, beating market expectations as strong performance in its investment bank and asset management businesses offset slower corporate activity and lingering regulatory scrutiny.

According to its earnings statement on Thursday, Deutsche Bank posted net profit attributable to shareholders of 1.3 billion euros ($1.56 billion) for the three months to December.

That exceeded the 1.12 billion euros forecast by analysts.

Group revenues for the quarter totaled 7.73 billion euros, broadly in line with the 7.72 billion euros consensus compiled by LSEG.

The lender’s common equity tier 1 (CET1) capital ratio stood at 14.2% at the end of the quarter, down slightly from 14.5% in the third quarter but up from 13.8% a year earlier, underscoring what the bank described as a solid capital position.

Investment bank and asset management lead gains

The results highlighted the importance of Deutsche Bank’s investment bank, which remains its main revenue engine.

Fixed income and currencies trading delivered particularly strong performance, alongside growth at the bank’s asset management arm, DWS, and its private banking division.

Chief financial officer James von Moltke said the quarter capped “fantastic record years” for the fixed income and currencies business and DWS.

He added that growth was also evident in private banking, while acknowledging that 2025 had been a “slightly weaker year” for corporate activity, with investment banking and capital markets more subdued.

Credit impairment charges, a measure of loan losses, came in at 395 million euros, below the 408.3 million euros expected by analysts and down from 417 million euros in the previous quarter.

Noninterest expenses fell 15% year on year, while provisions for credit losses declined 6%, helping lift profitability.

The bank reported a return on average tangible shareholders’ equity of 8.7% for the quarter and 10.3% for the full year, in line with its guidance.

Outlook for 2026 and market conditions

Speaking with CNBC’s “Europe Early Edition,” von Moltke said all four of the bank’s core businesses are “really well positioned, intrinsically and in this environment” to perform in 2026.

He expressed optimism about the outlook for initial public offerings, while cautioning that it was “hard to speculate” on the timing or likelihood of a market correction.

“There are good reasons to believe [markets] might be overstretched; there are good reasons to believe that the market can continue to perform,” he said. “There’s currently a risk on sentiment that’s pervasive in the marketplace… absent some sort of disruptive events, we actually think the markets are quite constructive.”

Von Moltke also said German households could benefit from the country’s fiscal expansion and that Deutsche Bank’s corporate banking division is well placed to benefit from increased investment.

Regulatory probe and shareholder returns

The earnings release followed news that German federal prosecutors had launched a probe into alleged money laundering at the lender, with authorities searching Deutsche Bank offices in Frankfurt and Berlin.

Von Moltke said the bank is cooperating with investigators and noted that the transactions under review date back to 2013 and 2018.

“The idea is that through the potentially late, filed, or delayed filing of suspicious activity reports, there may be a predicate here for money laundering. Let’s see what comes out of it,” he said.

“It’s from transactions that are well in the past. We’ve invested heavily over the years since in our financial crime risk management capabilities. We think those investments have been really good to position the company well and protect ourselves, as well as the marketplace, from potential money laundering.”

Alongside the earnings, Deutsche Bank said it plans to pay a dividend of 1.0 euros per share and has received authorization to buy back up to 1.0 billion euros of its own shares, signaling confidence in its balance sheet and earnings outlook.

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Hang Seng Investment Management has launched a physically backed gold exchange-traded fund that gives investors direct exposure to bullion while also laying the groundwork for future blockchain-based access.

The product comes as global asset managers explore ways to combine traditional commodities with tokenization, even as regulatory approvals remain a gating factor.

Gold ETF details

The Hang Seng Gold ETF began trading on Thursday on the Hong Kong Stock Exchange under the stock code 3170.

It is designed to track the LBMA Gold Price AM, the London-set morning benchmark that underpins much of the global gold market.

The fund is structured as a passive ETF and holds physical gold bars that meet London Bullion Market Association good delivery standards.

According to product disclosures, the gold is stored in vaults in Hong Kong, with HSBC appointed as gold custodian.

Creation and redemption are available to participating dealers in cash and, in limited cases, in physical gold.

Retail investors, however, buy and sell ETF units on the secondary market in the same way as listed shares.

The listed class trades in Hong Kong dollars, with a board lot size of 50 units.

The ETF carries an estimated ongoing charge of 0.40% per year and an estimated annual tracking difference of minus 0.50%.

Hang Seng has stated that the fund does not intend to make dividend distributions, meaning investor returns will depend entirely on movements in the gold price rather than income payouts.

Tokenized unit plans

Alongside the listed ETF, Hang Seng has outlined plans to introduce tokenized unlisted units of the same fund.

These units are not yet available and remain subject to regulatory approval, but they would represent ownership interests recorded on blockchain infrastructure rather than through traditional share registers.

HSBC has also been appointed as the tokenization agent for this structure.

Under the proposed model, HSBC would issue digital tokens representing ownership of ETF units, or fractions of units, with subscription and redemption transactions recorded on a public blockchain.

The prospectus notes that Ethereum is expected to be used initially as the primary blockchain.

Other public blockchains with comparable security resilience and distributed ledger capabilities may be adopted in the future.

Despite the use of blockchain, tokenized units would only be available through approved distributors, and there would be no secondary market trading for these tokens.

Gold price backdrop

The launch coincides with a sharp move higher in gold prices.

Spot gold surged another 4% on Thursday, pushing prices to $5,595 an ounce for the first time.

The rally reflects continued demand for safe-haven assets amid heightened economic and geopolitical uncertainty.

For ETF investors, this price environment places greater emphasis on cost efficiency and tracking accuracy, given that returns are driven solely by changes in the underlying gold price.

Tokenization trend

Hang Seng’s tokenization roadmap sits within a broader industry shift toward blockchain-based market infrastructure.

Last week, the New York Stock Exchange and its parent Intercontinental Exchange said they are developing a platform for trading tokenized stocks and ETFs.

The initiative aims to enable near-instant settlement and round-the-clock trading, pending regulatory approval.

Separately, a recent report from Sygnum said traditional financial institutions are increasingly moving toward blockchain-based systems.

Sygnum expects tokenization to enter the mainstream in 2026, with its co-founder and chief executive, Mathias Imbach, suggesting that up to 10% of new bond issuance by major institutions could be tokenized at launch.

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The latest earnings season has sharpened a new rule in the technology sector: investors are willing to tolerate unprecedented spending on artificial intelligence only when it clearly translates into accelerating growth.

The contrasting market reactions to Meta Platforms and Microsoft this week show how unforgiving that test has become.

Both companies slightly beat expectations for the December quarter.

Yet their forecasts told two very different stories about the payoff from AI, triggering sharply divergent share price moves.

Meta’s stock jumped about 10% in late trading, and was up by about 8% during Thursday’s premarket trading, while Microsoft’s fell 6.5%, underscoring how investors are now judging AI strategies not by ambition, but by measurable returns.

The shift reflects how the stakes have evolved since ChatGPT’s launch more than three years ago.

AI is no longer a futuristic promise; it is a near-term business metric.

Meta’s ad-driven AI versus Microsoft’s enterprise AI

Meta’s results highlighted the immediate commercial impact of artificial intelligence in its core business.

Revenue surged 24% in the December quarter, helped by AI-powered ad targeting that improved user engagement and advertising performance.

The company forecast first-quarter revenue growth of about 30% year on year, far ahead of market expectations.

“Meta’s headline numbers are a really interesting reflection of the market’s attitude toward spending in AI space,” said John Belton, portfolio manager at Gabelli Funds.

“All else equal, the market would typically be concerned, but they have a big revenue guide for the first quarter.”

The market’s response suggests that investors are more forgiving of heavy investment when the underlying business model is delivering visible gains.

Meta’s reliance on advertising — which accounts for about 98% of its revenue — has allowed it to quickly monetise AI improvements.

As Dan Salmon of New Street Research put it, “Jaw-dropping revenue acceleration trumps heavy investment, easily.”

Microsoft’s challenge, by contrast, lies in translating AI leadership into sustained financial momentum across a complex portfolio of businesses.

Its Azure cloud-computing division, widely seen as the key indicator of enterprise AI demand, grew 39% year on year in the December quarter — slightly above expectations but slower than the previous quarter.

“If you are bullish on this name, you think Azure can grow north of 40%,” said Jackson Ader, a software analyst at KeyBanc Capital, in an interview, WSJ reported.

“They didn’t, and the guidance makes it seem like that will be more difficult.”

Growth versus capital intensity

The divergence in investor sentiment is also rooted in the scale of spending.

Meta expects data-centre investments to surge as much as 87% this year to $135 billion and predicted a 43% jump in total expenses to $169 billion.

Yet its accelerating revenue trajectory has reassured markets that these costs may be manageable.

Microsoft, meanwhile, has been under pressure to justify its soaring capital expenditure after spending $37.5 billion in the October–December quarter.

Although the company expects capex to decline in the January–March period, concerns remain that its AI investments are outpacing the growth they are supposed to generate.

“Investors are disappointed that Microsoft’s capital expenditure spend and early foray into AI with ChatGPT is not significantly boosting earnings growth,” said Kathleen Brooks, research director at XTB.

She added that constrained data-centre capacity would further weigh on sentiment.

Microsoft has pointed to technical bottlenecks as one reason for slower cloud growth.

Chief Financial Officer Amy Hood said that if all newly available GPUs had been allocated to Azure rather than internal AI development, the growth rate would have exceeded 40%.

That explanation, however, has done little to calm markets increasingly focused on near-term returns rather than long-term potential.

OpenAI advantage or liability for Microsoft?

Another fault line lies in Microsoft’s deep relationship with OpenAI, which accounts for about 45% of its AI backlog.

While the partnership has cemented Microsoft’s leadership in enterprise AI, it has also raised concerns about concentration risk.

“Microsoft’s deep ties to OpenAI underpin its leadership in enterprise AI, but they also introduce concentration risk,” said Zavier Wong, market analyst at eToro.

The anxiety has been amplified by intensifying competition in the AI ecosystem.

OpenAI has reportedly issued internal warnings about rivals such as Google’s Gemini and Anthropic’s Claude, highlighting the fragility of first-mover advantages in a rapidly evolving market.

Meta faces fewer such dependencies.

Its AI strategy is largely built around internal systems designed to improve recommendation engines and advertising efficiency.

Chief Executive Mark Zuckerberg argued that AI would fundamentally transform user experiences and ad performance.

“Using AI will both improve the quality of the organic experience and of advertising,” he said, adding that superintelligence could create a “compounding effect” across Meta’s platforms.

Different business models, different investor tests

The contrasting reactions also reflect structural differences between the two companies.

Meta operates a relatively simple, consumer-focused business, where AI gains can be quickly monetised through advertising.

Microsoft’s portfolio spans enterprise software, cloud services, gaming, and consumer products, making the impact of AI harder to isolate and measure.

A sharp decline in Xbox sales, for instance, weighed on Microsoft’s More Personal Computing segment, diluting the perceived impact of AI-driven growth in Azure.

In this sense, the market’s verdict is not only about AI itself but about how directly AI can be tied to revenue growth.

The broader message from investors is becoming clear: ambition is no longer enough.

Companies that spend heavily on AI must demonstrate that the technology is already reshaping their financial trajectory.

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The US Bitcoin exchange-traded fund (ETF) market remained under pressure through January 28, recording a second consecutive day of net outflows and underscoring persistent caution among institutional investors despite a sharp slowdown in the pace of redemptions.

According to the data from Farside Investors, Bitcoin ETFs logged net outflows of around $19.6 million on January 28.

While the figure was modest compared with the heavy selling seen earlier in the month, it extended a weak stretch in which the funds have posted only one positive inflow day over the past eight trading sessions, and that lone gain amounted to just about $7 million.

The recent softness marks a clear reversal from the strong enthusiasm seen in mid-January.

Inflows on January 14, when Bitcoin ETFs attracted a combined $840.6 million in fresh capital.

Sentiment then deteriorated rapidly, culminating in the largest single-day outflow of the period on January 21, when $708.7 million exited the products.

Ethereum ETFs show signs of stabilisation

In contrast to Bitcoin, the US Ethereum ETF market showed tentative signs of stabilisation.

On January 28, Ethereum ETFs recorded net inflows of $28.1 million.

The rebound followed an earlier show of strength on January 26, when Ethereum ETFs attracted approximately $117 million in inflows.

The renewed interest provided some relief after a volatile period marked by sharp reversals in the second half of the month.

Ethereum funds had also enjoyed strong inflows in mid-January, peaking on January 14 with $175.1 million of net additions.

That momentum reversed abruptly alongside broader crypto market weakness, with the largest daily outflow recorded on January 21, when $287 million left Ethereum ETFs.

The bulk of that selling was driven by a $250.3 million outflow from BlackRock’s iShares Ethereum Trust (ETHA).

The January 28 data suggested a shift in tone. ETHA returned to net inflows with $27.3 million added, while persistent outflows from Grayscale’s ETHE and Ethereum Mini Trust products came to a halt.

While the recovery remains modest, it indicates that selling pressure in Ethereum-linked funds may be easing relative to Bitcoin.

Bitcoin Price Pressured by Fed and Geopolitics

Bitcoin prices remained under pressure, with the cryptocurrency trading below $88,000 on Thursday.

The decline followed a rejection at a key technical level earlier in the week and came in the wake of the Federal Reserve’s policy decision on Wednesday.

The Fed left its benchmark interest rate unchanged in a target range of 3.50% to 3.75%, a move that had been widely anticipated by markets.

However, the lack of a clearly dovish signal from the central bank capped upside for risk assets.

Federal Reserve Chair Jerome Powell said inflation remains well above the 2% target, reinforcing expectations that policymakers will move cautiously.

Two Fed governors, Stephen Miran and Christopher Waller, dissented in favour of a 25 basis-point rate cut, but the broader message from the meeting was one of patience.

Traders now largely expect the Fed to maintain its current stance through the end of the quarter and potentially until Powell’s term as chair concludes in May, even as markets continue to price in two rate cuts in 2026.

Beyond monetary policy, concerns over the Federal Reserve’s independence have added another layer of uncertainty.

A Department of Justice criminal investigation involving Powell and an evolving effort to remove Fed Governor Lisa Cook have drawn attention to potential political interference in monetary policymaking, dampening risk appetite further.

Geopolitical developments have also weighed on sentiment. Reuters reported that US President Donald Trump is considering options against Iran, including targeted strikes on security forces and leadership figures, as protests continue in the country.

“The arrival of a US aircraft carrier and supporting warships in the Middle East this week has expanded Trump’s capabilities to potentially take military action, after he repeatedly threatened intervention over Iran’s crackdown,” the report said.

The escalation in geopolitical risk has driven investors toward traditional safe-haven assets. Gold and silver prices pushed to new all-time highs, while risk-sensitive assets such as cryptocurrencies struggled to attract sustained buying interest.

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Bitcoin is stuck in a tight band ahead of this week’s Federal Reserve decision, with several analysts flagging a potential Wyckoff “spring” that could push prices below $80,000 before momentum rebuilds.

Flows and positioning remain skewed by US institutions, while safe-haven assets surge and macro uncertainty rises.

Bitcoin holds range as event risk builds

Bitcoin traded defensively around $88,000 after a move to $88,315, remaining trapped in a 60-day range between $85,000 and $94,000, according to Wintermute and TradingView data cited by Cointelegraph.

Material Indicators’ Keith Alan said a new daily “Trend Precognition” signal implies a high probability Bitcoin will not revisit yesterday’s low, after Monday’s brief dip below $87,000.

He added the daily close needs to hold above the 2026 open near $87,500 for strength, per his post cited by Cointelegraph.

Momentum and order books point to stabilization, not breakout

On CryptoQuant, Binance data shows daily price momentum is positive at approximately $1,676 with a momentum of 1.93%, a sign of a “quiet corrective move” after selling pressure rather than a strong bullish impulse, contributor Arab Chain wrote in a Quicktake.

Order-book signals suggest a “period of anticipation” rather than an imminent breakout.

Trader MartyParty used Wyckoff analysis to map a potential “spring” that could take BTC below $80,000 before rebounding, timing it around this week’s macro events, according to his commentary referenced by Cointelegraph.

US flows weigh, ETFs flip to outflows

Wintermute said US counterparties are net sellers, with a persistent Coinbase discount pointing to domestic pressure, while European accounts are marginal buyers and Asia is neutral.

The firm highlighted that “ETFs drive momentum in this market; when that bid disappears, you get choppy, directionless price action,” in its update.

US spot Bitcoin ETFs recorded their largest weekly outflow since February 2025 last week, reversing the strong inflows that accompanied January’s brief push toward $97,000, Cryptonews reported.

Who is selling, and who is not

On-chain metrics point to profit-taking rather than capitulation.

CryptoQuant’s Miners’ Position Index printed near -1.5, indicating miners are selling less than their 1-year average after monetizing inventory at $110,000 to $120,000 levels.

Whale exchange ratios are elevated, but deposits remain well below prior spikes, implying tactical distribution, per a note.

Macro backdrop, from the Fed to Dalio’s warning

The Federal Reserve sets policy on Wednesday, with rate cut expectations below 3%, according to CME Group’s FedWatch Tool cited by Cointelegraph.

Earnings from Microsoft, Meta, Tesla, and Apple, plus a new 25% tariff threat against South Korea, add to event risk, Cryptonews noted.

Ray Dalio warned the US is “on the brink” of shifting from Stage 5 pre-breakdown to Stage 6 systemic breakdown in his Big Cycle framework, citing unsustainable debt and social conflict.

Later stages may see “capital controls” and “reserve freezes,” he wrote in a long essay.

Meanwhile, gold rose above $5,066 and silver jumped 6.4% to $110.60, setting records as investors favored traditional havens, per Cryptonews.

What breaks the deadlock

Wintermute said “sixty days of compression” meeting heavy event risk suggests “something gives,” identifying $85,000 as key support and an ETF flow reversal as needed to clear the mid-$90k area.

B2 Ventures’ Arthur Azizov told Cryptonews that Bitcoin remains a risk asset, with a “base case” of consolidation that holds the $85,000 to $88,000 zone.

Price snapshot and levels to watch

Bitcoin traded at $88,553 earlier today and rose 1.4% as Asia opened, before slipping back below $88,000. The total crypto market cap stood at $3.06 trillion, down 0.18% on the day, per Cryptonews.

• $87,500 daily close level flagged by Material Indicators
• $85,000 as critical support, per Wintermute
• Wyckoff “spring” risk below $80,000, per MartyParty
• ETF flows and Coinbase premium for direction cues
• Momentum at 1.93% suggests stabilization, not breakout

With positioning cautious and catalysts stacked, a decisive move likely hinges on the Fed’s tone and whether ETF demand returns. Until then, range discipline and close attention to flow signals look prudent.

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