AI and Storage Demand in Resonance as the S&P 500 and Dow Hit New Record Highs

Market Overview

Strong and persistent AI-related demand once again lifted market sentiment. All three major U.S. equity indices extended their rally, with both the S&P 500 and the Dow Jones Industrial Average closing at fresh all-time highs.

At the stock level, Amazon stood out with gains of over 3%, while Tesla fell more than 4% amid concerns surrounding geopolitical developments in Venezuela and fluctuations in delivery expectations. The semiconductor sector remained broadly active. Micron Technology surged 10% after raising its earnings guidance, driving the semiconductor index to its third consecutive daily gain. Most notably, NVIDIA CEO Jensen Huang emphasized the massive storage requirements of AI systems, sending SanDisk shares soaring nearly 28%.

On the macro and FX front, the U.S. Dollar Index rebounded and approached a three-week high. The offshore Chinese yuan strengthened sharply, gaining nearly 100 pips intraday and reclaiming the 6.98 level. U.S. Treasury prices edged lower. Cryptocurrencies showed a classic “spike-and-pullback” pattern, with Bitcoin retreating below USD 92,000 after testing higher levels, while Ethereum also gave back part of its recent gains.

The metals market remained in a state of extreme volatility, driven by acute supply fears and aggressive short covering.

Industrial metals surged: LME copper closed above USD 13,000 per metric ton for the first time in history, extending its record-breaking run for a second consecutive session. LME nickel delivered the most dramatic move, jumping more than 10% intraday, marking its largest single-day gain in over three years. Shanghai nickel futures hit the daily limit during night trading.

Precious metals consolidated at elevated levels: Gold touched a one-week high intraday, with COMEX gold futures rising more than 1% at one point. Silver continued its powerful rally, surging over 6% intraday and approaching last weeks record high.

Energy markets: Crude oil prices retreated to more than one-week lows, falling over 2% intraday amid geopolitical headlines and shifting demand expectations.

Market Focus

● Metal Frenzy Continues: LME Nickel Surges Over 10% Intraday

LME nickel posted its largest intraday gain in over three years, with prices up more than 20% over the past two weeks, fueled by strong Chinese buying interest. LME copper broke above the USD 13,000 level intraday for the first time in history on Monday and extended gains by more than 3% on Tuesday. Expectations that the U.S. may raise tariffs have effectively “locked inventories inside the U.S.” Meanwhile, the sharp rally in silver futures has been driven by increased participation from Chinese retail investors. The combination of geopolitical risks and rate-cut expectations pushed COMEX gold futures up more than 1% intraday, moving closer to the pre-Christmas record high.

● U.S. Supreme Court May Rule on Tariffs This Week

The U.S. Supreme Court announced it may issue a ruling on tariff-related cases this Friday, January 9. After taking office in January 2025, the Trump administration invoked the International Emergency Economic Powers Act (IEEPA) to impose a series of tariffs via executive orders without congressional approval. Following rulings by both the U.S. Court of Appeals for the Federal Circuit and the U.S. Court of International Trade that deemed the administrations tariff package unlawful, the Trump administration appealed to the Supreme Court, where the case is currently under review.

Sources indicate that contingency plans have already been prepared to reimpose import tariffs should the ruling be unfavorable. The Supreme Court does not disclose in advance which decisions are ready for release, stating only that rulings may be announced when the justices take the bench at 10:00 a.m. Washington time. Given the expedited handling of this case by lower courts, a ruling on tariffs appears increasingly likely.

Key Events to Watch (GMT+8)

21:15 (US)

U.S. December ADP Employment Change (thousands)

23:00 (US)

U.S. December ISM Non-Manufacturing PMI

U.S. November JOLTs Job Openings (thousands)

U.S. December Global Supply Chain Pressure Index

U.S. October Factory Orders (MoM)

23:30 (US)

U.S. EIA Crude Oil Inventories for the Week Ending January 2 (barrels)