On Tuesday, emerging market equities and currencies staged a rebound, halting a three-day losing streak, as the U.S. dollar weakened and volatility in the precious metals market subsided. The MSCI Emerging Markets Index, which tracks stocks in these markets, surged as much as 2.7%, marking its largest single-day gain since April of last year.

Asian technology stocks led the advance, following the release of strong earnings forecasts from U.S. big data analytics firm Palantir Technologies Inc. (PLTR.US). Shares of Samsung Electronics skyrocketed by 11%, recording their biggest daily jump since 2008, while SK Hynix rose over 9%, making them the primary drivers of this rally.

The MSCI Emerging Markets Currency Index also climbed, with the Indian rupee posting its largest gain in over three years after the U.S. announced plans to significantly reduce tariffs on Indian goods. The South Korean won strengthened as the country's financial regulators stated they were "closely monitoring the market," and the South African rand also advanced, benefiting from a recovery in gold prices.

Emerging markets are recovering from the turbulence triggered by former U.S. President Donald Trump's nomination of Kevin Warsh for the next Federal Reserve Chair. This nomination had initially boosted the U.S. dollar, as markets perceived Warsh, a "hawkish candidate," as likely to prioritize inflation control over interest rate cuts.

Rajeev De Mello, a global macro portfolio manager at Gama Asset Management, views Warsh's nomination as a positive signal. De Mello stated, "Warsh's recent advocacy may have aided his nomination—centering on lowering policy rates and reducing the Fed's balance sheet. Persistently low policy rates would continue to support emerging market stocks and currencies."

On the economic data front, Turkey's January Consumer Price Index (CPI) rose 4.8% year-on-year, exceeding market expectations; however, the annual inflation rate edged down to 30.7% from 30.9% in December. Following the data release, the Turkish lira was largely flat, but bank stocks and government bonds declined as markets anticipated the central bank would proceed cautiously with interest rate cuts.