Markets Summary
Financial markets had a mixed day with significant moves in commodities, currencies and stocks. Here’s an overview:
goods:
- WTI crude oil a rose $0.81 (+1.09%) to settle $74.18supported by signals of stable demand.
- Gold acquired $13.76 (+0.52%) to close $2,649.69which reflects a safe haven purchase amid market volatility.
- Silver edges up $0.08 (+0.29%) to $30.21.
- Bitcoin experienced a sudden fall, overturning $5,400 that $96,841 after hitting a high of $102,760as investors took profits after recent rallies.
Currencies:
The US Dollar largely strengthened against its major peers, driven by strong economic data. Gains were most significant against:
- Swiss Franc (CHF): +0.52%
- euros (EUR): +0.47%
- More modest gains were recorded compared to Australian Dollar (AUD): +0.19% and New Zealand Dollar (NZD): +0.18%.
The dollar’s upward momentum was fueled by stronger-than-expected US economic indicators, including ISM Non-Manufacturing Indexwhich rose to 54.1 of 52.1and the JOLTS Job Openingswhich increased to 8.098 millionbeating forecasts for 7.7 million. Treasury yields rose in response, with 10-year yield climbing on 4.689% (+7.3 bps), reflecting investors’ expectations of extended economic resilience.
Federal Reserve Comment:
Fed official Thomas Barkin stressed the need for companies to adapt to changing tariffs and confirmed the commitment of the central bank Target inflation of 2%.. Barkin also indicated that price pressures remained elevated, suggesting that policy tightening may need to continue.
The US Treasury has auctioned $38 billion of 10-year notes with average demand
shares:
U.S. stock indexes fell after two straight days of gains, led by a sharp pullback in tech stocks:
- Dow Jones: -0.42%
- S&P 500: -1.11%
- NASDAQ Composite: -1.89%
- Russell 2000: -0.74%
Shares of Nvidia immersed 6.22%reversing earlier gains after hitting a record high within days of CEO Jensen Huang’s keynote at CES 2025. The tech selloff also led to significant declines in other high growth stocks, with MicroStrategy falling 9.94% and Palantir falling 7.81%.
Pres. elected Trump held a press conference in Mar a Lago. In addition to the announcement of a $20 billion investment to build new data centers by billionaire Hussain Sajwani, president of Damac Properties, Pres. elec commented on a number of different topics
- Interest rates are too high
- Biden’s ban on offshore oil and gas drilling will be overturned
- Something will have to be done about Canada-Mexico trade. He says we don’t need cars, milk and oil
- Asked for assurances that he would not use military or economic coercion as he tries to take control of Greenland, he said he could not assure either.
- He calls Greenland crucial for national security
- They could consider tariffs on Denmark via Greenland if they don’t give up Greenland.
- He thinks Meta has come a long way
- He says he’s fine with spending cuts. He wants to see the debt ceiling extended.
Overall insight:
Today’s market action reflected a complex interplay of stronger US economic data, rising yields and profit-taking in tech stocks. With strong dollar strength and increased volatility in stocks, traders are keeping a close eye on upcoming economic reports and guidance from the Fed.
Tomorrow, the build-up to Friday’s US Non-Farm Jobs report will continue with the ADP Non-Farm Employment report due at 8:15am ET. Expectations are 139,000 versus 146,000 last month. Weekly claims for the unemployed will be published a day earlier due to the day of mourning for Pres. Carter. Expectations are 214K vs. 211K last week. The US stock market will be closed on Thursday as well.
The Fed’s Waller will speak at 8:30 am ET, and the minutes from the Fed’s December meeting (25 basis point bearish) will be released at 2 pm ET.