The escalation in the Middle East has driven up the price of gold sharply at the start of the week. The price of a troy ounce of gold is currently trading at around US$5,350, well above Friday's level. The precious metal is continuing its strong performance from last week and is once again heading towards the record high of $5,595 reached at the end of January. JP Morgan and Bank of America have reaffirmed their targets of $6,000, with JP Morgan forecasting $6,300 by the end of the year, supported by continued purchases by central banks. Physical gold flows through Dubai's trading hub have been severely disrupted as airlines have canceled flights throughout the Gulf region. Experts say that the disruption to Dubai's logistics could lead to a short-term shortage of physical supplies to European refineries.

The Swiss stock market's benchmark SMI closed on a firm note on Friday after staying positive right through the day's trading session, thanks to sustained buying at several counters. The SMI, which very nearly moved past its record high - it touched a high of 14,056.85 intraday - ended with a gain of 100.57 points or 0.72% at 14,014.30. Swiss Re climbed about 3.75%. The re-insurer reported a 47% rise in 2025 net profit at $4.762 million. The company also announced plans to repurchase up to $1.5 billion of shares in 2026. Kuehne + Nagel ended up by 2.2%, while Swisscom and Novartis moved up 1.91% and 1.87%, respectively. Novartis announced today that it has successfully completed its acquisition of Avidity Biosciences, Inc. Nestle, Sika, Givaudan, ABB, Geberit and SGS gained 1%-1.52%. Roche Holding, VAT Group and Lonza Group also ended notably higher. Richemont and Sandoz Group closed lower by 3.35% and 3.3%, respectively. Partners Group ended 2.03% down, while Holcim settled 1.42% down. Lindt & Spruengli and UBS Group also ended notably lower.

Europe
European stocks were modestly higher on Friday despite lingering concerns regarding artificial-intelligence related layoffs and workforce disruption. In economic releases, consumer confidence in the United Kingdom dropped to a three-month low in February, defying expectations for a modest improvement. The U.K. consumer confidence index fell to -19 from -16 in January, the Consumer Confidence Barometer survey by the GfK and the Nuremberg Institute for Market Decisions (NIM) revealed, while economists had expected a mild increase to -15. The latest reading is the lowest since November. The pan-European STOXX 600 was up 0.2 percent at 634.24 after finishing marginally lower on Thursday amid a flurry of corporate earnings releases. The German DAX gained 0.1 percent and the U.K.'s FTSE 100 added half a percent while France's CAC 40 was down 0.1 percent. London-listed recruiter Hays slumped nearly 8 percent after reporting a sharp decline in first-half earnings. GKN Aerospace owner Melrose slumped 14 percent after it forecast 2026 revenue below expectations. Belgian telecom operator Proximus plummeted 21 percent. The company announced job cuts and slashed dividends after revenues fell 6.6 percent year-on-year in the fourth quarter. French steel tubes maker Vallourec advanced 1.5 percent after Q4 revenue came in above expectations. German online takeaway food company Delivery Hero tumbled 4.5 percent after reporting annual gross merchandise value (GMV) slightly below market expectations. Chemical giant BASF fell more than 2 percent after it forecast flat earnings this year.

United States
Stocks moved notably lower during trading on Friday, extending the pullback seen during the previous session. The major averages all moved to the downside, with the tech-heavy Nasdaq adding to the steep loss posted on Thursday. The major averages ended the day well off their lows of the session but still in negative territory. The Dow slumped 521.28 points or 1.1 percent to 48,977.92, the Nasdaq slid 210.17 points or 0.9 percent to 22,688.21 and the S&P 500 fell 29.98 points or 0.4 percent to 6,878.88. For the week, the Dow tumbled by 1.3 percent, the Nasdaq slumped by 1.0 percent and the S&P 500 decreased by 0.4 percent. The continued weakness on Wall Street came following the release of a Labor Department report showing producer prices in the U.S. increased by more than expected in the month of January. The report said the Labor Department's producer price index for final demand climbed by 0.5 percent in January after rising by a downwardly revised 0.4 percent in December. Economists had expected producer prices to rise by 0.3 percent compared to the 0.5 percent increase originally reported for the previous month. The Labor Department also said the annual rate of producer price growth edged down to 2.9 percent in January from 3.0 percent in December. Economists had expected yearly growth to slow to 2.8 percent. Block CFO Amrita Ahuja said the payments company sees an 'opportunity to move faster with smaller, highly talented teams using AI to automate more work.' Airline stocks showed a substantial move to the downside on the day, resulting in a 5.0 percent nosedive by the NSYE Arca Airline Index. The index ended the session at its lowest closing level in almost a month. Significant weakness was also visible among financial stocks, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index plunging by 4.9 percent and 3.0 percent, respectively. Software and semiconductor stocks also saw notable weakness, while pharmaceutical, retail and telecom stocks showed strong moves to the upside.

Asia
The attacks by the USA and Israel against Iran caused some sharp falls on the East Asian stock markets at the start of the week. On the other hand, oil prices are rising sharply and investors are increasingly shifting into ‘safe havens’ such as gold. The stock markets in Hong Kong and Tokyo recorded the most significant losses, with the Hang Seng Index and the Nikkei 225 both falling by 1.6 per cent. In Hong Kong, technology stocks also suffered.

Bonds
In the U.S. bond market, treasuries moved sharply higher, extending the upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slumped 5.5 basis points to a four-month closing low of 3.962 percent.

Analysis
UBS raises Santander target to EUR 12.20 (11.70) – Buy
Bank of America raises Axa target to EUR 47 (45) – Buy
Berenberg raises Solvay target to EUR 25 (23.50) – Sell

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