The S&P 500 Index, Dow Jones Industrial Average, and Nasdaq 100 are each experiencing declines today, as the S&P 500 is down 0.33%, the Dow is down 0.35%, and the Nasdaq has dropped 0.34%. March E-mini S&P and Nasdaq futures are also lower by 0.35% and 0.38%, respectively. Weakness in the chip and data storage sectors, alongside falling prices in mining stocks, is contributing to these declines. As the year draws to a close, this marks a low for the S&P 500 and Dow after a week, and a 1.5-week low for the Nasdaq.
Gold prices have dipped to a 2.5-week low, while silver has plummeted over 7%. This, combined with higher bond yields—where the 10-year T-note yield has risen by 2 basis points to 4.14% following a surprise drop in weekly jobless claims—points to market caution amid expectations of a potential hawkish stance from the Federal Reserve.
Today’s trading volume is notably lower than usual, influenced by market closures in Germany and Japan for New Year’s festivities. Despite lower stock prices, a more robust labor market is evidenced by the US weekly initial unemployment claims dropping by 16,000 to a one-month low of 199,000, contrasting expectations for an increase to 218,000.
On a brighter note, positive economic data has emerged from China, where the manufacturing Purchasing Managers’ Index (PMI) improved to 50.1, reflecting the fastest growth in nine months. The non-manufacturing PMI also saw an uptick, reinforcing global growth prospects amidst a generally bullish seasonal trend for stock markets historically observed during late December.
Looking ahead to US economic reports, attention will focus on the S&P manufacturing PMI, set for release soon, which is expected to hold at 51.8. Currently, the odds for a 25 basis point rate cut during the upcoming FOMC meeting are seen at 15%, indicating cautious investor sentiment regarding future monetary policy.
Foreign markets exhibited mixed results, with the Euro Stoxx 50 slightly down 0.08% while China’s Shanghai Composite managed a marginal gain of 0.09%. The Nikkei in Japan remains closed due to a bank holiday.
In specific stock movements, companies like Micron Technology and data storage names are among the day’s biggest losers, while Nike leads the Dow with gains attributed to insider buying by its CEO. Vanda Pharmaceuticals surged by over 31% following FDA approval of its new drug, contrasting with significant losses faced by Corcept Therapeutics after a failed product review.
As markets navigate these fluctuations, the underlying labor market strength, combined with positive signs from China, paints a picture of resilience and eventual recovery potential as we head into the new year.