US Markets Rally into the Weekend – Nasdaq Up 1.5%
US stock markets rallied strongly into the weekend, with the S&P and Dow achieving their best weekly performance since the election. The Dow gained 0.78%, the S&P rose by 1.00%, and the Nasdaq outperformed both, closing up 1.51%. The dollar and Treasury yields also climbed during the day, with the DXY rising 0.39% to 109.35. The 2-year yield increased by 5.3 basis points to 4.283%, while the 10-year yield edged up 1.5 basis points to 4.627%.
Oil prices declined further amid confirmation of a ceasefire between Israel and Hamas, with Brent dipping 0.6% to $80.79 and WTI dropping 1% to $77.88. Gold prices fell in line with the stronger dollar, losing 0.4% to close just above the $2,700 mark at $2,701.03 an ounce.
All Eyes on Washington in Markets Today
The focus of the trading world today is on Washington, D.C., where Donald Trump will be sworn in as the 47th President of the United States. Traders and investors anticipate significant market volatility.
During President Trump’s previous tenure, his frequent Twitter updates often triggered sharp market moves. Today and in the coming days, tariff updates are likely to take centre stage. A moderate approach could result in ‘risk-on’ sentiment, while stricter tariff policies – which the President seems inclined towards – may lead to risk aversion, strengthening the dollar and US yields.
A Game of Two Halves for Traders Today
While the macroeconomic calendar offers few scheduled data releases to excite traders, the day could still prove highly volatile, particularly later on. Although US markets are closed for a holiday, Donald Trump’s inauguration and potential executive orders in the coming days are expected to spark market reactions.
Earlier in the day, the People’s Bank of China (PBOC) will announce any updates to its Loan Prime Rates. With no changes anticipated, any unexpected move could trigger fresh volatility. However, until key announcements and updates from the US begin to emerge, market conditions are expected to remain largely rangebound.
