North American equity markets hit record highs early in the week before reversing course, with the S&P 500 weighed down by a negative reaction to Microsoft’s earnings and rising tensions with Iran, while the TSX Composite pulled back with retreating gold prices. The TSX was led by the energy sector as WTI crude climbed above US$65 per barrel, driven by a winter storm disrupting US output and rising Middle East risks. The materials sector materially underperformed as a late-week selloff in precious metals contributed to the decline. Meanwhile, the communication services sector led the S&P 500, driven by strong results from Meta Platforms (Facebook). Gold and silver prices broke well above US$5,000 and US$100 per ounce, respectively, fuelled by safe-haven demand, a weaker US dollar, and the debasement trade (investing in hard assets to hedge against government-issued currency devaluation) until President Trump’s nomination of Kevin Warsh for the US Federal Reserve’s new chair triggered a selloff in gold and silver. The US dollar experienced volatility as well.

Microsoft shares fell 10% despite beating profit estimates because the market fixated on slowing cloud growth and a record US$37.5 billion in AI spending amidst rising competition from Google. Conversely, Meta’s shares jumped 10.4% after reporting better-than-forecast earnings as revenue surged 24% to US$60 billion while the company raised its next quarter sales forecasts above estimates, supporting Meta’s increased 2026 AI spending guidance of up to US$135 billion. Tesla shares fell 3.2% despite beating earnings estimates, as investors focused on the company’s first annual revenue decline, pressured by competition from China’s largest electric car company, BYD. Tesla also plans to double AI capital expenditures to US$20 billion. Apple shares only rose 0.4% despite iPhone revenues of US$85.27 billion, driven by the iPhone 17 and a rebound in China, blowing past forecasts as concerns over rising memory prices capped gains. 

Attention was paid to capital spending and investment as Bloomberg reported the potential for Nvidia, Microsoft, Amazon and SoftBank to spend US$90 billion to invest in OpenAI’s new funding round. Investors are increasingly focused on each company’s ability to turn that spending into revenue and free cash flow.

In the US health care space, insurers plummeted after news that Medicare payment rates for 2027 would see an average rate increase of only 0.09%. Rates are directed by the government and the action is likely a result of the recent outsized inflationary pressure on health insurance.  Shares of UnitedHealth Group, Humana, and CVS Health Corporation fell 20%, 21%, and 14% respectively, with UnitedHealth further pressured after forecasting a revenue decline this year.

Globally, Indonesia’s stock market crashed and triggered a trading halt as MSCI, a global market data company, warned about the country's potential downgrade to frontier market status. Following MSCI’s demand for market reform, the CEO of the Indonesian Stock Exchange resigned. The European Union (EU) and India finalized a deal removing tariffs on more than 90% of traded goods, offering India export relief from 50% US tariffs while EU exports to India are predicted to double. Consensus estimates project 14% S&P 500 earnings growth in 2026 led by the technology (+31%) and materials (+21%) sectors, while early 2027 figures suggest that earnings growth will broaden to other sectors.