Wall Street posts three-week losing streak as Iran war batters sentiment
Taiwan Semiconductor Manufacturing (TSM) reported that its January sales rose 37%, which is its fastest growth in several months and well above its 2026 guidance for 30% sales growth. TSM makes the high-end chips for Microsoft Surface laptops, Apple computers, and, of course, Nvidia’s GPUs. This strong sales growth for TSM likely means that the AI boom is still accelerating, which bodes well for Nvidia’s guidance on February 25th after it announces its latest quarterly results.
Treasury bond yields rose after the payroll report on the anticipation that the Fed may not cut key interest rates until May, when Kevin Warsh takes over as the new Fed Chairman. The Labor Department on Wednesday announced that payrolls rose 130,000 in January, which was substantially above economists’ consensus expectation of a 75,000 increase. The November and December payrolls declined by a cumulative 17,000. Interestingly, government jobs declined by 42,000 in January, so the private sector created 172,000 jobs according to the Labor Department. The unemployment rate declined to 4.3%. Average hourly earnings rose by 0.4% to $37.17 in January and 3.7% in the past 12 months.
The U.S. is about to force a leadership change in Cuba. There is effectively a crude oil blockade in the country, so flights are being canceled due to a lack of aviation fuel, and hotels are closing due to persistent blackouts. There are reportedly 4,000 Russian tourists in Cuba, and Aeroflot said it was restricting service and flying an empty plane to pick up tourists. There are also reportedly 3,000 Canadian tourists in Cuba who are stranded after Air Canada suspended all flights to Cuba due to jet fuel shortages. On January 29th, President Trump’s executive order described Cuba as “an unusual and extraordinary threat” and warned of new tariffs for any country that supplies Cuba with crude oil, so Mexican crude oil exports stopped.
The U.S. Navy seized the eighth crude oil tanker from Venezuela in the Indian Ocean after a month-long pursuit. Specifically, the Aquila II tried to evade the U.S. blockade of Venezuela. The fact that the U.S. Navy is now pursuing and seizing “shadow tankers” is expected to concern Iran and Russia, which have also been known to rely on such shadow tankers to transport crude oil despite sanctions. The Wall Street Journal reported that the Trump Administration has discussed seizing Iranian crude oil tankers to put further pressure on Iran to end its nuclear program but held off over worries about disrupting the global crude oil market.