US stocks edged lower yesterday, while gold bounced back and benchmark Treasury yields turned higher on the penultimate trading day of a turbulent year.
All three indexes dipped into negative territory shortly after the opening bell of what is likely to be a light-volume session, a subdued ending to a volatile year.
Having weathered a year of tariff wars, the longest government shutdown in US history, and roiling geopolitical strife, all three US indexes, along with their global counterparts, are set to log robust, double-digit gains. “It’s been a year of corporate resilience,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “For all the anxiety about the state of the labour market consumer spending was still pretty good.” “People were still mostly working and still mostly spending and that underlies the whole economy,” Mayfield added.
On the geopolitical front, efforts to resolve the Russia-Ukraine war were complicated by Russian President Vladimir Putin’s warning that Russia’s negotiating stance will toughen following its accusations that Kyiv attacked Putin’s residential complex in Roshchino. The Dow Jones Industrial Average fell 127.26 points, or 0.26 per cent, to 48,334.67, the S&P 500 fell 10.70 points, or 0.15pc, to 6,895.04 and the Nasdaq Composite fell 39.80 points, or 0.17pc, to 23,434.55.
European shares climbed to all-time highs, with a boost from banking and commodities stocks. MSCI’s gauge of stocks across the globe fell 0.67 points, or 0.07pc, to 1,020.02. The pan-European STOXX 600 index rose 0.62pc, while Europe’s broad FTSEurofirst 300 index rose 14.92 points, or 0.64pc. Emerging market stocks rose 0.10pc to 1,403.11. MSCI’s broadest index of Asia-Pacific shares outside Japan closed higher by 0.07pc, at 722.25, while Japan’s Nikkei fell 187.44 points, or 0.37pc, to 50,339.48.
Gold and silver prices rebounded from the prior session’s steep selloff, largely attributable to year-end profit-taking following the precious metals’ bumper year. “Trees don’t grow to the sky and the move in gold over the last couple of years – basically doubling – requires a longer period of consolidation,” Mayfield said.
Gold remains poised to register its best year of gains since 1979. Spot gold rose 0.67pc to $4,360.79 an ounce, while spot silver rose 5.5pc to $76.18 per ounce.
The dollar strengthened ahead of the release of the Fed minutes, but remained on course for its steepest annual drop in eight years. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.24pc to 98.25, with the euro down 0.2pc at $1.1748.
Against the Japanese yen, the dollar strengthened 0.32pc to 156.54. In cryptocurrencies, bitcoin gained 1.63pc to $88,665.04. Ethereum rose 1.55pc to $2,980.13. The yield on benchmark US 10-year notes rose 1.8 basis points to 4.134pc, from 4.116pc late on Monday.
The 30-year bond yield rose 1.6 basis points to 4.8202pc from 4.804pc late on Monday. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 0.2 basis points to 3.463pc, from 3.465pc late on Monday.
Oil prices steadied amid fading hopes of an imminent Russia-Ukraine peace deal and rising Middle East tensions concerning Yemen. US crude rose 0.46pc to $58.35 a barrel and Brent rose to $62.06 per barrel, up 0.19pc on the day.
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