ORLANDO, Fla., Jan 29 (Reuters) – Volatility swept global markets on Thursday as fears of a U.S. strike on Iran and the threat of another U.S. government shutdown rattled oil and metals, while AI bubble fears hit tech stocks and pushed the Nasdaq and S&P 500 into the red.

More on that below. In my column today, I look at Federal Reserve Chairman Jerome ‌Powell’s press conference on Wednesday, and why it was more telling about what he didn’t say about Fed independence than what he said about the economy.

If you have more time to read, here are a few articles I recommend to help you understand what happened in the markets today.

1. Trump weighs Iran strikes to inspire new protests, sources say 2. US trade deficit widens to largest in nearly 34 years on Nov. 3. Trump, Democrats seek to avoid shutdown as funding bill fails in Senate 4. Big Tech results show investor demand for profits from big AI spending

Key market moves today

* STOCKS: Wall Street falls, ⁠Nasdaq -0.7%. Indonesia -10% at a time before comparing losses, Germany’s DAX -2%. * SECTORS/SHOCKS: ‌U.S. technology is down 2%, but communications software is down 3%. SAP -15%, Microsoft -10% Apple +4% after-hours after Q4 results. * FX: Dollar back on the defensive, bitcoin -6%. * BOLS: Treasury yields fall 2-3 bps, bullish curve widens. * COMMODITIES/METALS: Oil rises up to 5%. Gold, silver hit new highs and then close lower. Copper at a record level too.

Today’s talking points

* Oil on a tear

Oil prices are soaring, driven by renewed geopolitical risk concerns, namely tensions between the US and Iran. Brent crude broke above $70 a barrel on Thursday for the first time since July, WTI crude is the highest since September.

Sustained high energy prices will worry policymakers. Year-on-year changes in the price of oil have been disinflationary since 2024, and at the beginning of this year they were at -25%. This is now -5%. With the affordability crisis likely to be a key issue in the US midterm elections, President Donald Trump may also be worrying.

* Volatility causes dislocation

Thursday’s trading was marked by sharp price swings across all asset classes, with particularly extreme swings in commodity markets. Gold, silver and copper soared to fresh highs, but then fell: gold and silver closed the day lower.

They appear to be buckling under the weight of the speculative excess that has fueled their recent spectacular gains, particularly in the value sector. Volatility and price dislocations have also spilled over into the dollar and forex this week. The sense of fairness is not immune.

* Technological destruction

Is the AI ​​bubble starting to deflate? Shares in some of the world’s biggest tech companies fell on Thursday as investors worried whether hundreds of billions in AI spending would yield adequate returns. Microsoft and SAP posted double-digit losses.

As Carlyle Group analysts point out, the history of transformative technology shows that the AI ​​bubble will either deflate or burst. But that’s part of the process, so there’s some pain along the way. “The bottom line is that bubbles are endemic to the technological revolution.”

What could move the markets tomorrow?

* Japan Retail Sales (Dec) * Japan Industrial Production (Dec) * Japan Tokyo Inflation (Jan) * Taiwan GDP (Q4, Preliminary) * Eurozone GDP (Q4, Flash) * Germany Unemployment (Jan) * Germany Inflation (Jan, Flash) * US Producer Price Inflation (Dec) * Chicago US PMI (Jan) including US Furniture, Chevron, Exex, US Verizon * Intervening the president of the Atlanta Fed, Alberto Musalem

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The opinions expressed are those of the author. They do not reflect the views of Reuters News, which, according to the principles of trust, is committed to integrity, independence and freedom from bias.

(By Jamie McGeever; Editing by Nia Williams)