Tech Stocks Push Higher – Nasdaq Up 1.25%
US tech stocks climbed higher yesterday on what many considered the first ‘proper’ trading day of the year. The CAD rose after Canadian Prime Minister Justin Trudeau announced he will be stepping down. The Dow Jones edged 0.06% lower on the day, but the tech-heavy S&P 500 and Nasdaq powered ahead, closing up 0.55% and 1.24%, respectively.
The dollar took another significant step backward, with the DXY dropping 0.63%. Longer-dated yields continued to rise, with the 2-year yield losing 0.4 basis points to settle at 4.274%, while the benchmark 10-year gained 3.3 basis points to reach 4.630%.
Oil prices retreated after recent gains, with Brent crude falling 0.39% to $76.21 and WTI dropping 0.74% to $73.41. Gold had a volatile session but ultimately finished close to flat, ending the day down 0.17% at $2,635.60 an ounce.
Tariffs in Focus for Markets
Global markets experienced sharp moves yesterday as conflicting updates on potential tariffs from the incoming US government impacted financial products. Reports suggesting that tariffs might not be as severe as expected when the new President takes office boosted tech stocks and weakened the dollar. However, this has since been refuted by Donald Trump, causing some earlier market moves to be pared back.
Traders expect more volatility in the coming weeks as tariffs remain a key issue. Confirmation of swift and significant tariffs could lead to stock corrections and dollar appreciation. Conversely, if tariff implementation appears to be scaled back or delayed, stocks are likely to rise further, and the dollar could retreat into recent ranges.
Data Calendar Picks Up from Today
This week marks a significant start to the year for US economic data, culminating in Friday’s key Non-Farm Payrolls report and Unemployment Rate. The calendar becomes more active from today, with traders anticipating market moves tied to data releases.
The Asian session has little scheduled, but the European open will feature crucial inflation data from Switzerland in the form of the latest CPI numbers. In the US session, the first of four job-related reports for the week will be released early, with the JOLTS Job Openings figure expected to show 7.73 million available positions.
The US ISM Services PMI and Canadian Ivey PMI numbers are also due, but market focus is likely to center on the job update.
