A look at the day ahead in European and global markets

By Stella Qiu, Australia Economics & Markets Correspondent

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Day two of Donald Trump's second presidency culminated in an announcement that OpenAI, SoftBank Group and Oracle will form a venture called Stargate and invest $500 billion in AI infrastructure across the United States, though how much of that was already long planned is anyone's guess.

It shares its name with a 1994 sci-fi movie and long-running TV series, in which Stargate is a device providing instantaneous travel between distant planets.

OpenAI CEO Sam Altman speaks next to SoftBank Group CEO Masayoshi Son and Oracle Chairman Larry Ellison after U.S. President Donald Trump delivered remarks on AI infrastructure at the Roosevelt room at the White House in Washington, U.S., Jan. 21, 2025. REUTERS/Carlos Barria

Though its goals are likely more modest than interstellar teleportation, the project could help consolidate America's lead over China in the race to develop AI. Investors are not shy to agree, pushing SoftBank shares up 10% in Asia, helping lift the Nikkei 1.7%. Taiwan stocks gained 1.3%.

The region's under performers were China and Hong Kong, with the former's blue-chip index falling 1% and the latter's Hang Seng sliding 1.6%.

To be sure, that was in part due to Trump saying a 10% tariff on Chinese goods would commence on Feb. 1.

Still, that's much lower than the 60% pledged during his election campaign. And it remains to be seen if the 10% tariff will happen at all now that Trump needs to negotiate with Beijing for the sale of part of TikTok to either Tesla CEO Elon Musk or Oracle Chairman Larry Ellison.

Graphics are produced by Reuters.

In Europe, stock markets are set for a slightly higher open, with pan-European STOXX 50 futures up 0.2% and UK FTSE futures rising 0.1%.

European Central Bank President Christine Lagarde will be at the World Economic Forum in Davos, Switzerland. Appearances by other ECB officials include Governing Council member Francois Villeroy de Galhau who will be speaking about interest rates.

Market participants reckon the bank is all but certain to lower its policy interest rate by 25 basis points next week, but the question for many is how low can it go. Predicting the terminal rate won't be easy given inflation is still above the ECB's target but growth headwind is strengthening due to Trump putting friends and foes alike in his America-first firing line.

So far, swaps imply four rate cuts this year to 2%.

Over on Wall Street, Nasdaq futures <NQc1> gained 0.7%, lifted by a 14% jump in Netflix, which boasted a record gain in subscribers last quarter.

Still, with Stargate becoming reality in one form or another, there will perhaps be less need to stream sci-fi in the coming years.

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