Wednesday starts with renewed optimism across global markets. After last week’s sharp declines, indices are staging a strong recovery, and what’s notable is the leadership coming from Europe—specifically Germany’s DAX. For a change, European equities are outpacing their American counterparts, reversing the recent dynamic where Wall Street was consistently leading global sentiment.
This rebound follows a strong push higher on Tuesday, which already hinted at a potential V-shaped recovery. While the long-term technical picture remains cautious due to last week’s bearish engulfing formations, price action now suggests buyers are stepping back in.
On the currency front, there’s a clear move into risk-on territory. Antipodean currencies like the Australian and New Zealand dollars are gaining strength, while safe-haven currencies such as the Japanese yen and Swiss franc are losing ground. This mirrors the tone in equities and confirms broader risk appetite is returning—for now.
Commodities are also participating in the rally. Oil, which posted a weak session on Tuesday and made new local lows, is now reversing course. The bounce is steady but significant, showing that traders are not ready to abandon energy just yet. Meanwhile, metals are trading higher too. Gold and silver are climbing, with Tuesday’s bullish session continuing into the European open. There’s a sense that the recent sell-off in precious metals may have been overdone, particularly with real yields stabilizing and the dollar stalling.
From the macroeconomic side, the calendar is light today, but there was one important early release. New Zealand’s unemployment rate surprised, coming at 5.2% compared to the expected 5.3%. This stronger labor data gave the New Zealand dollar an extra boost and sets a positive tone for the region.
The earnings calendar, however, remains full and continues to drive sharp moves in individual stocks. Earlier this morning, Novo Nordisk reported better-than-expected earnings, helping to support sentiment. On the other hand, AMD reported strong revenue after Tuesday’s close, but weak forward guidance disappointed investors, and the stock is set to open 6% lower. This reaction highlights the current sensitivity of the market—not just to results, but to outlooks.
Later today, traders will be watching pre-market earnings from McDonald’s and Walt Disney. Post-market, all eyes will be on Uber, which could set the tone for tech and growth-focused stocks into Thursday.
Wednesday’s session marks an important moment. If this bounce holds and gains extend through the day, we may have confirmation that last week’s drop was a short-lived correction rather than the start of something deeper. Still, with big earnings ahead and macro surprises always lurking, the market remains alert and cautious beneath the surface.