By Stephen Culp
NEW YORK (Reuters) – Stocks on Wall Street fell on Thursday and benchmark U.S. Treasury yields rose to their highest level since April amid light post-Christmas trading.
The modest but widespread selling sent all three major U.S. stock indexes slightly lower despite the so-called Santa rally, in which stocks often get a boost during the holiday season thanks to low liquidity, tax-loss harvesting and year-end bonus investing. .
Uncertainty surrounding President-elect Donald Trump’s policies has driven up gold prices and helped propel the 10-year Treasury yield to its highest level in nearly eight months.
“This is light volume and we are now recovering some earlier losses through profit-taking on Tuesday’s rally,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “I think we’re in the Santa Claus rally, with a few bumps in the road today, and it’s probably safe to say that the end-of-year rally is going to continue.”
With just a few trading days left in the year, the Nasdaq and Dow have seen gains of 33%, 26% and 14%, respectively, in 2024.
The main concerns for 2025 are the extent of monetary easing by the Federal Reserve, Trump’s tariffs and other policies, and various geopolitical tensions.
On the economic front, new claims for unemployment benefits were slightly lower than analysts’ estimates, while pending claims rose to their highest level since November 2021, suggesting that laid-off workers have increasingly difficulty finding a new job.
The S&P 500 slipped 28.97 points, or 0.07%, to 43,268.06, the S&P 500 slipped 4.50 points, or 0.07%, to 6,035.54 and fell 18 .10 points, or 0.09%, to 20,013.03.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.1% but remained on track for a weekly gain.
Global stocks appeared poised to end the year with a second straight annual gain of more than 17%, unfazed by escalating geopolitical tensions and economic headwinds.
European markets were closed for Boxing Day.
MSCI’s index of world stocks fell 0.29 points, or 0.03 percent, to 856.30.
Emerging market stocks fell 1.47 points, or 0.14%, to 1,084.39. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.15% lower at 574.40, while rising 437.63 points, or 1.12%, to 39,568 .06.
They resume their ascent.
“We are probably on track to get to 4.75% to 5.0% on 10-year bonds and the reason is that the bond market is full of uncertainty, while the stock market is full of enthusiasm ” Cardillo said. “The bond market is pricing in a more hawkish Fed likely in the first half of the year.”
The benchmark 10-year U.S. bond yield rose 3.2 basis points to 4.619%, from 4.587% late Tuesday.
The 30-year bond yield rose 2.5 basis points from 4.76% to 4.7863% late Tuesday.
The yield, which typically moves based on interest rate expectations, rose 2.3 basis points to 4.353%, up from 4.33% late Tuesday.
The dollar rose slightly against a basket of global currencies, on expectations that the greenback stands to benefit from the new Trump administration’s policies.
The , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.09% to 108.20, with the euro up 0.04% to $1.0409.
Against the Japanese yen, the dollar appreciated by 0.4% to 158.03.
Oil was essentially unchanged, abandoning its earlier strength on China’s stimulus hopes and an industry report that showed falling U.S. inventories.
rose 0.01% to $70.11 per barrel and rose to $73.61 per barrel, up 0.04% on the day.
Gold rose on safe-haven demand as investors awaited new signals on the health of the US economy.
rose 0.76% to $2,633.19 an ounce. The U.S. rose 0.3% to $2,627.90 an ounce.
