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Investors wait for Fed signals after rollercoaster few

days

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Microsoft ( MSFT ), Meta and Tesla reporting results later

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Europe hits record high after China AI-driven volatility

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Czech central bank wants a bitcoin stash

By Marc Jones

LONDON, Jan 29 (Reuters) - World markets were suddenly

looking calmer on Wednesday as the week's rollercoaster ride for

stock markets morphed into wait-and-see ahead of the Federal

Reserve's first rate meeting of the year and results from

Microsoft ( MSFT ), Meta and Tesla.

The Fed is widely expected to end a three-meeting run of

rate cuts later and stay on hold, but investors will be eager to

get a sense of just what it makes of new U.S. President Donald

Trump's eventful first nine days back in charge.

There was plenty to be getting on with before that though.

European shares climbed to a record high early on, as strong

results from Dutch chip equipment maker ASML sent its

stock soaring nearly 11% and the wider tech sector up

4.5%.

The parts of Asia that weren't on Lunar New Year holidays

had gained overnight too as had Wall Street before that.

Investors seemed to have papered over the global rout

suffered on Monday when the emergence of lower-cost Chinese AI

model, DeepSeek, wiped more than half a trillion dollars off

Nvidia's ( NVDA ) value alone.

With the Fed looming on the horizon, currency and bond

markets were mostly in a holding pattern.

The 10-year U.S. Treasury yield was at 4.52%, 3 bps lower on

the day. European yields dipped with the ECB expected to cut its

rates again on Thursday, while the yen nudged higher

to 155.24 per dollar after Bank of Japan meeting minutes pointed

to more rate hikes there.

State Street's head of global macro strategy Michael

Metcalfe said that after all the recent market dramas, Wednesday

was, in theory, going to have some actual predictability.

"Today is one day of certainty in that we know the Fed won't

move rates," he said.

Despite the noise around Trump trade tariffs, State Street

expects Fed chief Jerome Powell to maintain the message that

rates are likely to keep falling, while the return of calm in

stock markets was also a positive.

"Two days in and it doesn't look like there is broader

contagion," Metcalfe said.

BIG TECH EARNINGS

Futures for the U.S. S&P 500 were up 0.2%, following

a 0.9% rise on Tuesday. Nasdaq futures pointed 0.4%

higher following its 2% rebound and Frankfurt-listed Nvidia ( NVDA )

shares were 2% higher again.

Attention is now on the mega-cap tech company earnings

coming up on Wall Street later from Facebook owner Meta

Platforms ( META ), Microsoft ( MSFT ) and Tesla.

"While questions remain unanswered, the market is voting

that the innovation that DeepSeek could bring to the ecosystem

will unlikely impact the AI capex cycle and could even lead to

new channel of demand for GPUs (graphics processing units),"

Pepperstone strategist Chris Weston said.

Traders were also digesting Trump's latest tariff threats.

The White House said he still planned to hit Mexico and

Canada with steep tariffs on Saturday and that he was "very

much" considering fresh tariffs on China at the weekend.

There wasn't much reaction from the Mexican peso. It

edged up slightly to 20.5169 per dollar, while Canada's currency

was a touch stronger at C$1.4394 versus the greenback.

Oil prices eased slightly, with Brent crude oil futures

dipping 0.2% to $77.35 per barrel after settling up 0.5%

overnight. U.S. West Texas Intermediate crude futures

edged down about 0.1% to $73.70, following Tuesday's 0.8% rise.

The day's crypto action meanwhile came from the Czech

Republic where its central bank Governor Ales Michl said in an

interview with the Financial Times he would present a plan to

the bank's board on Thursday to buy bitcoin.

He added that, if approved, the bank could eventually hold

as much as 5% of its 140 billion-euro ($146.13 billion) reserves

in the cryptocurrency.