Major stock indexes mostly eased and Treasury yields rose yesterday ahead of today’s key US jobs report, while defence company shares jumped amid US President Donald Trump’s plans for a $1.5 trillion military budget.
An aerospace and defence index rose to an all-time high, with European defence shares also hitting a new high. Oil prices also climbed as investors monitored developments in Venezuela.
Over the weekend, US military forces captured Venezuelan President Nicolas Maduro. The White House said on Tuesday that Trump was also discussing options for acquiring Greenland.
Data showed the number of Americans filing new applications for unemployment benefits rose moderately last week, suggesting that layoffs were relatively low at the end of 2025, though demand for labour remained sluggish.
Traders are pricing in at least two rate cuts from the Federal Reserve this year, although a divided central bank indicated in December there would be only one cut in 2026. The Fed is expected to keep rates steady at its meeting this month.
Today’s US employment report for December will be key.
“From an interest rate standpoint, it’s not clear how Fed policy should or will react to that and what it means about the economic outlook more than a couple of months forward,” said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott in Philadelphia.
The Dow Jones Industrial Average rose 171.04 points, or 0.35 per cent, to 49,167.35, the S&P 500 fell 6.83 points, or 0.09pc, to 6,914.96 and the Nasdaq Composite fell 168.65 points, or 0.71pc, to 23,420.08.
MSCI’s gauge of stocks across the globe fell 2.86 points, or 0.28pc, to 1,028.62.
The pan-European STOXX 600 index fell 0.21pc.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.08pc to 98.81.
The euro flirted with its eighth straight drop against the dollar.
The yield on benchmark US 10-year notes rose 4.1 basis points to 4.179pc, from 4.138pc late on Wednesday.
Venezuela’s default-stricken bonds were finally cooling off following their near 40pc surge after the weekend’s events fuelled investor hopes for a massively complex debt restructuring.
US crude rose 1.8pc to $57.00 a barrel and Brent rose to $61.13 per barrel, up 1.95pc on the day. Gold prices were nearly flat.
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