Wall Street's key indexes, including the S&P 500 and Nasdaq, ended the trading session on a positive note on Tuesday, led by tech stocks that showed a strong recovery. Meanwhile, investors were assessing President-elect Donald Trump's statements about the possible introduction of tariffs against major US trading partners, and also analyzing the latest data from the Federal Reserve minutes.
Short-term US interest rate futures have recovered slightly after the publication of the Fed minutes. The document showed that there is no unity within the regulator regarding further rate cuts. The minutes recorded that participants in the November meeting on the 6th-7th decided not to give clear forecasts on the further direction of monetary policy in the near future.
Financial market analysts interpreted the minutes differently. Jamie Cox, Managing Partner at Harris Financial Group, expressed confidence that rates will be cut at the regulator's next meeting and will continue the downward trend over the next year.
"The minutes confirmed my expectations for continued rate cuts. The regulator will likely act in this direction throughout the next calendar year," Cox noted.
Paul Ashworth, lead North American economist at Capital Economics, also expects a 25 basis point rate cut. However, he cautioned that the decision will hinge on macroeconomic data. Ashworth highlighted the importance of fresh labor market and inflation data for November, which he said will be key to the Fed's next move.
The market continues to be influenced by macroeconomic factors, with the tech sector acting as the engine of growth. Investors are eagerly awaiting more data that could shape the course of US monetary policy.
President-elect Donald Trump has revived the idea of imposing significant tariffs on imports that could have a major impact on global trade. He has proposed a 25 percent conditional tariff on goods from Canada and Mexico, threatening the North American Free Trade Agreement (NAFTA) he negotiated during his first term.
An even more aggressive move is the proposed 10 percent levy on Chinese imports, on top of existing tariffs, raising tensions and the possibility of new rounds of trade wars.
News of potential tariffs hit automakers hard. Ford and General Motors, whose supply chains are tightly linked between the U.S., Mexico, and Canada, were hit hard. GM shares were particularly hard hit, falling nearly 9 percent.
"Tariffs could make a number of products significantly more expensive, which in turn would reduce revenues for companies that rely on overseas manufacturing," says Robert Pavlik, senior portfolio manager at Dakota Wealth.
The current situation is causing serious concerns among market participants. According to Pavlik, investors are having a hard time assessing the outlook.
"The market is currently in turmoil as players prepare for the first month of the new year, but there is no clarity on future trade conditions and economic policy," he noted.
Trump's new initiatives threaten both global economic ties and the stability of American companies. Investors continue to react cautiously, waiting to see how trade policy will affect the market at the beginning of next year.
US stock markets ended the day with confident growth. The Dow Jones Industrial Average added 123.74 points (+0.28%), stopping at 44,860.31. The broad S&P 500 rose 34.26 points, or 0.57%, to close at 6,021.63, while the tech-heavy Nasdaq Composite added 119.46 points, or 0.63%, to close at 19,174.30.
The main driver of growth was the technology sector, which was pushed up by shares of giants Microsoft and Apple. In particular, Microsoft quotes rose by 2%, which provided significant support to the Nasdaq index. The information technology sector demonstrated the largest increase among all market segments.
Wells Fargo shares rose by 0.6%, standing out against the backdrop of sluggish dynamics in the banking sector. The reason for the growth was reports that the bank is close to completing the process of eliminating violations related to the scandal with fake accounts. According to sources, the bank may receive permission to lift the asset cap of $ 1.95 trillion next year.
Not all blue chips ended the day with growth. Shares of biopharmaceutical company Amgen plunged 4.8% after disappointing news about its experimental obesity drug. The drug failed to meet expectations, prompting a sharp reaction from investors.
Tech continues to be the market's leading growth force, offsetting weakness in other sectors. Investors continue to evaluate company prospects and react to corporate news, creating a mixed but generally positive dynamic on Wall Street.
The S&P 500 hit another all-time high on Monday, marking its sixth straight session in the green. Along with it, the small-cap Russell 2000 index rose to its first record in three years. However, the Russell 2000 ended the day down 0.7%, giving up some of its gains.
Shares of pharmaceutical company Eli Lilly soared 4.6% after US President Joe Biden proposed expanding the Medicare and Medicaid programs. The new initiative involves expanding access to expensive obesity drugs, which caused optimism among investors and pushed the company's quotes up.
Amid the overall growth of shares, there was a mixed dynamic. On the NYSE, the number of falling stocks exceeded the number of rising ones by a ratio of 1.57:1. Despite this, the exchange recorded 358 new highs and only 52 lows. The S&P 500 index noted 63 new 52-week highs and 3 lows, while the Nasdaq Composite showed 124 new highs and 91 new lows.
Investors were cautious in currency markets, awaiting new trade initiatives from President-elect Donald Trump. His promises to impose additional tariffs on China, Canada and Mexico have heightened tensions.
In this environment, the traditionally safe-haven Japanese yen continued to strengthen, reaching a three-week high against the dollar. A decline in US Treasury yields only added to the pressure on the American currency.
The market continues to react to conflicting signals: record index figures coexist with concerns about trade tariffs and global instability. Investors face new challenges ahead, including the impact of tariff policy and the reaction of key global economies.
The MSCI Asia-Pacific Equity Index managed to recover slightly from early losses, adding 0.1%. Meanwhile, the region's markets have come under increasing pressure from Donald Trump's announcement of tough tariffs, which has caused a decline in Japan, Taiwan and South Korea. These countries' indices, including Japan's Nikkei 225, were among the leaders of the decline.
Despite the general negativity, Chinese and Hong Kong stocks have shown a recovery from recent lows. Investors have bet that Beijing could introduce support measures aimed at stabilizing the economy in the face of new threats from the United States.
The European STOXX 600 index has fallen by 0.4%, continuing to lose ground under the influence of global trade risks. The American S&P 500 has also signaled readiness for a decline at the start of trading, reflecting the cautious mood of investors.
Donald Trump made more big announcements late Monday, announcing plans to impose 25% tariffs on Mexican and Canadian goods immediately upon taking office. He also announced an additional 10% tariff on Chinese imports. These threats have heightened market fears of retaliation from affected countries.
Among other moves, Trump has appointed Jamison Greer as his US Trade Representative. Greer, known for his role in the first trade war with China, is seen as a signal of the new administration's readiness for an aggressive trade policy.
Trump's weekend pick for US Treasury Secretary has sparked cautious optimism in the bond market. Market participants associate his appointment with the possibility of controlling the growing national debt, which has supported activity in the Treasury market.
Markets remain tense amid Trump's escalating trade rhetoric. Investors are weighing the implications of his initiatives for the global economy, as well as the prospects for new support measures from Asian countries.
On Tuesday, the Canadian dollar and Mexican peso remained close to their multi-year lows. The Chinese yuan also failed to strengthen, returning to the level of a four-month low reached the day before.
The US dollar weakened against most major currencies. The euro strengthened by 0.2%, reaching $1.0515, and the pound sterling rose to $1.26. Against the Japanese yen, the US currency lost almost 1%, falling to 151.660.
Investors are avoiding risk ahead of the Thanksgiving holiday in the US. Many market participants are taking a break for the rest of the week, reducing overall trading activity. Traders are focused on the upcoming PCE deflator data, a key inflation indicator, due out on Wednesday.
The New Zealand dollar showed significant gains, adding 0.9% to $0.5887. The sharp strengthening came after the country's central bank cut interest rates by 50 basis points. This disappointed some market participants who expected a more aggressive cut, but caused a positive reaction in other sectors.
After four days of correction, Bitcoin has started to show signs of recovery. The most popular cryptocurrency added 1.7%, rising to $93,211. Recall that earlier it reached a record high of $99,830, but retreated amid profit-taking by investors.
Gold prices continued to rise, adding 0.3% to $2,649 an ounce. The metal is gaining ground amid a weak dollar and ongoing uncertainty in global markets.
Forex and commodity markets are mixed. The US dollar is weak in key areas, while gold and the New Zealand dollar are rising. Bitcoin is also trying to regain lost ground, indicating increased volatility among digital assets.
Oil prices are showing moderate stability as traders analyze the implications of the recent ceasefire agreement between Israel and Hezbollah. Additional attention is focused on the upcoming OPEC+ meeting scheduled for Sunday.
Brent crude futures fell slightly by 0.1%, reaching $72.72 per barrel. At the same time, US West Texas Intermediate (WTI) crude showed a symbolic increase of 0.1%, rising to $68.84 per barrel. These minor fluctuations reflect the uncertainty of the markets ahead of key events that could affect the balance of supply and demand.
Investors are cautiously awaiting the results of the OPEC+ meeting, which is expected to confirm the current production cut strategy. Any changes in quotas could become a catalyst for sharper movements in the market. At the same time, attention is also focused on potential geopolitical risks that could affect price dynamics.
The oil market remains relatively stable, waiting for key events. Participants' attention is focused on the OPEC+ decisions and their possible consequences for the global market.
Financial giant JPMorgan raised its forecast for the Mexican stock market from "neutral" to "overweight", noting the positive impact of economic growth in the United States. At the same time, the bank cut its estimate for Brazilian shares to "neutral" due to the weakening of the Chinese economy and pressure from Donald Trump's tariff policy.
According to JPMorgan strategist Amy Chayo Cherman, Mexican stocks are supported by robust growth in the United States. Much of this effect is due to an increase in remittances from Mexicans working in the United States, which become more valuable due to the weakness of the Mexican peso (MXN).
"A weak peso strengthens the purchasing power of remittance recipients in Mexico, which helps domestic consumption," Cherman said.
Unlike Mexico, Brazil faces challenges from slowing growth in China, Brazil's largest importer of goods. Falling demand and lower prices for commodities such as soybeans are threatening the country's export revenues.
JPMorgan cut its rating on Brazil's equities to "neutral" from "overweight," citing the impact of these factors on the economy.
The monetary policies of the two central banks are also having a noticeable impact on markets. Mexico's central bank is expected to continue cutting interest rates next year, which should support economic growth. Brazil, by contrast, is likely to maintain a tight stance and raise rates through 2025, which could dampen corporate earnings.
Latin American stock markets are having a tough year. The MSCI Brazil index has lost 23% year-to-date, while the MSCI Mexico index has fallen more than 28% in dollar terms. By comparison, the broader MSCI Emerging Markets Index has gained 6%.
The Mexican stock market is benefiting from support from the U.S., while Brazil continues to face challenges related to the global economy and domestic monetary policy. Latin American markets remain at risk, despite improvements in some segments.
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