S&P 500 hits new high despite tech jitters

• European markets rise despite -0.1% UK GDP decline.
• Precious metals surge after Fed balance sheet pivot.
• S&P 500 hits new high despite tech jitters.

European markets are on the rise in early trade today, feeding off the back of the record highs set in the S&P 500 yesterday. In the UK, the latest GDP data highlighted the detrimental effect of Rachel Reeves constant pre-budget flip-flopping, with the country shrinking by -0.1% in the three-months to October. Notably, for that period we saw services sector activity fall by 0.3%, while construction shrank by 0.6%. Ultimately when looking at the FTSE 100, the strength seen this morning comes via two distinct areas; financials and miners. Crucially, the heavy commodity component of the index means that we typically see the index benefit from periods of strength like that seen across the likes of copper, gold, silver, and palladium.

The strength seen for precious metals this week highlights the response to a FOMC meeting that saw the committee kick-start a process that sees the balance sheet expand once again. While only tentative in nature, the move to start buying T-bills does highlight the willingness to gradually increase liquidity, helping to boost sentiment for gold and silver. With silver hitting record highs and gold less than 2% away from the $4381 high, the bull market appears to be kicking in once again as haven demand meets concerns around devaluations in the fiat monetary system.

Yesterday saw the S&P 500 hit a fresh record high despite the jitters seen throughout the tech sector in the wake of Oracle and Broadcom earnings. With AI jitters softening demand for tech stocks, we have seen a wider scope of stocks considered by investors that appear to be diversifying as a means to lessen risks in the face of bubble concerns. The financials have been a particular area of strength, coming off the back of the Fed meeting that saw a sharp upgrade to the 2026 GDP forecast. In an environment where we have seen particular concerns around the weakness seen in the jobs market, the perception of a strong ramp-up in economic growth does alleviate fears for shareholders in the banks. For today, the economic calendar looks to be very sparse, while traders will be busy preparing for an incredibly busy week ahead that sees the belated release of US CPI and jobs data alongside rate decisions from the BoE, BoJ, and ECB.