US stocks softened yesterday following mixed economic data and Walmart’s disappointing coming-year forecast, while signs of a sturdy labor market helped the dollar extend its upward climb.
All three major US stock indexes followed their European counterparts modestly lower, setting course to snap their three-session winning streaks, while mounting concerns over oil supply arising from a potential US-Iran conflict helped bolster crude and gold prices.
“Today (investors are) weighing of some of the economic data and what Walmart’s earnings are saying in terms of the consumer,” says Chuck Carlson, CEO at Horizon Investment Services in Hammond, Indiana.
“I think investors are trying to grapple with trying to make a decision whether this rotation trade has legs or if it’s starting to run its course,” Carlson added, referring to the transition away from mega-cap tech-related momentum stocks.
A spate of economic data showed a dip in jobless claims and US trade data, which recorded its widest goods deficit record as imports rebounded despite President Donald Trump’s tariffs.
The Dow Jones Industrial Average fell 121.37 points, or 0.24 per cent, to 49,542.26, the S&P 500 fell 13.27 points, or 0.19pc, to 6,868.52 and the Nasdaq Composite fell 43.72 points, or 0.18pc, to 22,712.95.
European shares retreated from Wednesday’s record closing high as investors parsed a mixed bag of corporate earnings, particularly Airbus and iron ore producer Rio Tinto.
MSCI’s gauge of stocks across the globe fell 2.21 points, or 0.21pc, to 1,047.48. The pan-European STOXX 600 index fell 0.62pc, while Europe’s broad FTSEurofirst 300 index fell 16.37 points, or 0.65pc.
Emerging market stocks rose 0.77 points, or 0.05pc, to 1,561.65. MSCI’s broadest index of Asia-Pacific shares outside Japan closed higher by 0.35pc to 800.35, while Japan’s Nikkei rose 323.99 points, or 0.57pc, to 57,467.83.
Crude prices continued to rise on supply concerns arising from the growing possibility of a potential military conflict between the US and Iran.
US crude rose 2.06pc to $66.53 a barrel and Brent rose to $71.58 per barrel, up 1.79pc on the day.
The dollar continued its climb as solid jobless claims data and minutes from the US Federal Reserve appeared to show a divide among policymakers regarding the need to cut interest rates in the near term.
“The jobs market is okay, but there’s still a bit of job insecurity that’s out there,” Carlson added. “It gives the Fed a pause, trying to evaluate not just the numbers, but how job insecurity is affecting the rest of the economy.”
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.14pc to 97.84, with the euro down 0.09pc at $1.1771.
Against the Japanese yen, the dollar strengthened 0.11pc to 154.99.
In cryptocurrencies, bitcoin fell 0.07pc to $66,274.64. Ethereum declined 1.07pc to $1,920.86.
US Treasury yields edged higher as traders evaluated the Fed’s path forward regarding interest rate cuts ahead of the Treasury Department’s $9 billion auction of 30-year debt.
The yield on benchmark US 10-year notes rose 0.9 basis points to 4.09pc, from 4.081pc late on Wednesday.
The 30-year bond yield rose 1.4 basis points to 4.7206pc from 4.707pc late on Wednesday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 1.2 basis points to 3.472pc, from 3.46pc late on Wednesday. Gold prices increased on renewed demand for the safe-haven metal as investors monitored US-Iran tensions, while jobless claims data hinted at labour market stability.
Spot gold rose 0.69pc to $5,013.54 an ounce. US gold futures fell 0.04pc to $4,984.50 an ounce.
Meanwhile, Bahrain All Share Index closed at 2,064.82 points yesterday, marking a decrease of 4.47 points below the previous closing. This decrease was due to the drop in the materials sector.
Bahrain Islamic Index has closed at 1,022.01 points, marking an increase of 1.46 points above the previous closing.
Results indicated that 88 equity transactions took place with a volume of 1,902,394 worth BD837,320.
Investors traded mainly in the materials sector, representing 56.08pc of the total value of securities traded.
&uuid=(email))