Asian markets were mixed on Friday, with Japan closing higher and Australia clawing back from session lows, while Chinese shares edged down on news that manufacturing activity in the mainland declined in February.
U.S. Treasurys rose on Friday, lifted by safe-haven buying on the eve of federal spending cuts that could curb U.S. economic growth.
Gold headed towards its longest run of monthly declines in more than 16 years, as an improved economic backdrop and lower inflation concerns continued to blunt its appeal to investors.
The price of oil fell, as investors sold off commodities with the stock market surging toward a record high.
Stalemate in the United States over automatic government spending cuts due to take effect March 1 and an inconclusive election in Italy undermined the euro on Thursday.
Asian stocks rallied on Thursday, with Japan's Nikkei leading gains as the Federal Reserve's steadfast support for an ultra-easy monetary policy and a successful bond auction in Italy lifted risk appetite in a volatile week for global markets.
Volatility calmed down Tuesday but brace yourself: Pros say bigger gyrations could be the norm for the next few weeks as investors watch what's going on in Washington and Europe.
U.S. stock index futures edged higher Wednesday following the durable goods orders report and ahead of Fed Chairman Ben Bernanke's second round of testimony, but ongoing worries over political deadlock in Italy kept a lid on gains.
The commitment to a stimulative monetary policy reiterated by Federal Reserve Chairman Ben Bernanke favored riskier assets over safe-haven U.S. debt, sending U.S. bond prices lower on Wednesday.
Gold fell 1 percent, nearly erasing all of the previous session's gains, hit by disappointment over a lack of new Federal Reserve stimulus and deflation worries over across-the-board deep U.S. spending cuts.
European shares extended gains in the afternoon session on Wednesday, helped by a successful bond auction in Italy and the U.S. Federal Reserve's defense of its asset purchases on Tuesday.
Europe is still a very attractive market despite the current political and economic risks, David Rubenstein, co-founder & managing director of the Carlyle Group, told CNBC on Wednesday.
Brent crude oil futures settled at $111.87 a barrel, as investors weighed expectations that the Federal Reserve's stimulus program will be maintained against the sixth straight weekly rise in U.S. crude oil stockpiles.
The euro rose against the dollar for the first time in three sessions on Wednesday on relief over solid demand for Italy's first bond sale since the country's general elections.
Asian shares rebounded on Wednesday to snap previous losses after Federal Reserve Chairman Ben Bernanke confirmed his commitment to monetary easing. However, Tokyo stocks bucked the trend as investors sold off exporter stocks on a rising yen.
Fed Chairman Ben Bernanke is expected to provide soothing words about the Fed's easy money policies, but markets may react more to new bearish concerns out of Europe.
As the spotlight is thrown back on the euro zone crisis amid a political stalemate in Italy, investors are scrambling for beaten-down safe havens, scooping up gold and the yen.
Euro zone shares sank to three month lows on Tuesday after an Italian election stalemate renewed concerns about the future of the euro zone.
U.S. stock index futures rose across the board following the upbeat S&P/Case-Shiller home price report and a day after the Dow and S&P 500 logged their worst one-day performance in 2013 amid worries about Italy's election result.
U.S. Treasurys briefly extended their losses on Tuesday on news of an unexpectedly big jump in U.S. consumer confidence and single-family home sales in January.
European shares were flat on Friday as talks over the "fiscal cliff" stalled.
European shares closed lower on Wednesday for a third consecutive session, with resurging worries about the global economic outlook undermining investor sentiment.
Standard & Poor's decision to cut Spain's credit rating to one notch above junk status is weighing on markets.