Global stock indexes saw a positive trend on Monday, driven by solid gains in U.S. tech-related shares. The Nasdaq jumped more than 2%, demonstrating the strength of the tech sector. However, U.S. oil prices experienced a 4% drop as price cuts by Saudi Arabia, the top oil exporter, overshadowed tensions in the Middle East.
Despite the overall rise in stock indexes, Boeing faced a setback with its shares falling 8%. This limited gains in the Dow Jones industrial average. The U.S. Federal Aviation Administration ordered the temporary grounding of some Boeing 737 MAX 9 jets, following an incident where a panel blew off an Alaska Air Group jet midair.
Investors showed a cautious approach, resulting in a decrease in U.S. dollar and Treasury yields. The anticipation of U.S. inflation data release and the uncertainty surrounding when the U.S. central bank might cut interest rates contributed to this cautious sentiment. A report by the New York Federal Reserve revealed that consumers expect lower inflation, weaker income, and reduced spending in the coming years.
The upcoming release of U.S. consumer price data for December is highly anticipated. Market analysts predict a 0.2% increase in headline inflation for the month, translating to an annual gain of 3.2%.
In the cryptocurrency realm, bitcoin experienced an impressive 7.1% surge, reaching $47,065. This marks the highest level since April 2022. Investors are now eagerly waiting for the U.S. Securities and Exchange Commission’s decision regarding the approval of bitcoin exchange-traded funds.
Furthermore, stock market participants are focusing on the upcoming quarterly results from companies. Major banks, including JPMorgan Chase, will kick off the next U.S. reporting period with reports due on Friday.
The S&P 500 technology index notably rose by 2.8% on the day. Market experts believe that the gains in major tech companies will likely be sustainable after their strong performance in the previous year.
The Dow Jones Industrial Average recorded a 216.90-point increase, equivalent to a 0.58% rise, settling at 37,683.01. The S&P 500 rose by 66.30 points, or 1.41%, closing at 4,763.54. Meanwhile, the Nasdaq climbed by 319.70 points, or 2.20%, ending the day at 14,843.77.
On a global scale, the MSCI world equity index, which monitors shares in 49 countries, observed a gain of 0.89%. European stocks also ended the day on a positive note, with a 0.4% increase.
In the energy sector, U.S. crude experienced a 4.1% drop, settling at $70.77 per barrel. Similarly, Brent crude fell by 3.4% to settle at $76.12. This decline in oil prices can be attributed to Saudi Arabia’s decision to lower the official selling price of its flagship Arab Light crude to Asia, reaching the lowest level in 27 months. Additionally, geopolitical tensions arising from disruptions in the Red Sea and the Israeli conflict with Hamas impacted shipping costs in Europe and raised concerns about potential further escalations.
Moreover, the benchmark 10-year Treasury yield decreased by three basis points (bps) to 4.011% in afternoon trading. Concurrently, the U.S. dollar slipped 0.3% against the yen, amounting to 144.21 yen. The U.S. dollar index, which monitors the greenback against a basket of currencies, also experienced a 0.2% decline, resting at 102.28.
Although rate cuts were anticipated to begin in March by fed funds futures traders, the likelihood of such a move has decreased following the mixed data from the Labor Department and the Institute for Supply Management (ISM). While the Labor Department’s report showed better-than-expected job growth in December, the ISM’s survey indicated a decline in services sector activity for the same month.
In the precious metals market, gold prices reached a low not seen in three weeks.