US stock indexes closed lower on Thursday, with the biggest losses reported by healthcare and technology companies, as investors remained cautious ahead of Friday's payrolls report.
The S&P 500 tech index (.SPLRCT) lost 0.2%, retreating from its record high reached the day before. Recall that on Wednesday, all three key US indices updated their historical closing highs. However, the euphoria was short-lived: the decline in the tech sector was one of the reasons for the market rollback.
Shares of Synopsys (SNPS.O), a company specializing in the development of software for designing microcircuits, fell by 12.4%. The reason was the revision of forecasts for the 2025 financial year: revenue, according to the company's expectations, will be lower than the consensus forecast of analysts. One of the main factors behind this decline was the decline in sales in China, where the market remains difficult.
The largest decline was shown by shares of UnitedHealth (UNH.N), which lost 5.2%. This decline had a noticeable impact on the Dow and S&P 500 indices, for which UnitedHealth shares are one of the key ones. At the same time, the S&P 500 Healthcare Index (.SPXHC) fell by 1.1%.
Other representatives of the sector also suffered significant losses: Cigna (CI.N) shares fell by 2.3%, and Molina Healthcare (MOH.N) by 3.2%.
The collapse in the healthcare sector is associated with new risks that are being reassessed by market participants after the tragic death of UnitedHealthcare CEO Brian Thompson. Recall that Thompson, who headed one of the divisions of UnitedHealth Group, was killed in Manhattan. The event caused shock among the management of insurance companies, which also affected investor sentiment.
Friday's US employment report became the main expectation of the week. Experts believe that data on the state of the labor market can set the direction for further movement of stock indices. Market tensions are rising, and investors are trying to play it safe and avoid excessive risk.
Thus, Thursday was a day of losses for US markets, where worrying corporate news and macroeconomic expectations overshadowed recent optimism.
Economic forecasts point to a rise in jobs in November, which could be a key factor in the future performance of US markets. According to a Reuters poll, nonfarm payrolls are expected to increase by 200,000. This is higher than the modest gain of 12,000 in October, which was the smallest figure since December 2020.
Earlier on Thursday, data showed a slight increase in new jobless claims in the US. The figures added uncertainty to the overall economic outlook, forcing market participants to pay close attention to the state of the labour market. The employment figures are expected to be an important indicator for the Federal Reserve's future actions.
Daniel Morgan, portfolio manager at Synovus Trust, said market participants are focused on economic data and the Fed's possible response. "It's clear that Wall Street is going to trade based on what the Fed is going to do," he said. Investors are trying to take into account all aspects of the macroeconomic environment to predict the future dynamics of rates and their impact on stock indices.
The Federal Reserve remains focused on fighting inflation, and the employment report will be an important milestone for the regulator. If the data shows significant employment growth, it could push the Fed to tighten monetary policy further. Conversely, weak data could give markets a break and reduce the likelihood of a sharp rate hike.
Thus, Friday's report became an expected event for investors ready to adjust their strategies depending on the data on the labor market. The balance between economic growth and the actions of the regulator remains the main intrigue of the week.
The main US stock indices ended trading on Thursday in the red, continuing to reflect the tension in the market and cautious expectations of investors. The Dow Jones Industrial Average (.DJI) fell by 248.33 points (-0.55%), closing at 44,765.71. The S&P 500 (.SPX) lost 11.38 points (-0.19%), falling to 6,075.11. The Nasdaq Composite (.IXIC) ended the day with a drop of 34.86 points (-0.18%), recording a level of 19,700.26.
Markets took special note of the statement made by Federal Reserve Chairman Jerome Powell on Wednesday. He noted that the U.S. economy is showing more resilience than expected when the central bank began cutting interest rates in September. His comments about the possibility of a slower pace of rate cuts have forced investors to reassess their expectations.
Market participants now estimate the probability of a quarter-point rate cut this month at about 70%. The uncertainty is weighing on key indexes, especially rate-sensitive stocks.
After a sharp rise earlier in the day, cryptocurrency and blockchain stocks came under pressure. This happened against the backdrop of Bitcoin, the world's largest cryptocurrency, breaking the $100,000 mark for the first time in history, but was unable to maintain that gain.
The largest corporate holder of Bitcoin, MicroStrategy (MSTR.O), ended the trading session down 4.8%. The decline reflects the volatility of the cryptocurrency sector, which remains sensitive to market fluctuations.
On the New York Stock Exchange (NYSE), declining stocks outnumbered rising stocks by 1.25 to 1, with 378 new highs and 74 new lows recorded.
On the Nasdaq, the situation was even more pessimistic: 2,833 stocks ended the day down, while 1,488 showed growth. The ratio of falling to rising stocks was 1.9 to 1, which underscores the overall negative sentiment among market participants.
Amid the Fed's statements and cryptocurrency market volatility, market participants continue to monitor economic indicators. Anticipation of Friday's employment report adds tension, and rate dynamics remain a key driver of market movement.
Thus, the current investor sentiment is one of caution and careful waiting, while stock indices react to macroeconomic and corporate news.
On Thursday, the trading volume on US stock markets amounted to 14.12 billion shares, which was below the average value over the last 20 trading days, which was 14.7 billion. Such a decrease in activity indicates that investors are taking a wait-and-see attitude, analyzing current macroeconomic factors and assessing possible risks.
Experts say the main reason for the decrease in trading activity is the tense anticipation of key economic data, in particular, the employment report, which is due to be published on Friday. This data can have a significant impact on the market, since it is directly related to the Federal Reserve's decisions on interest rates.
Analysts note that a decrease in trading volumes often indicates the desire of market participants to minimize risks in the face of uncertainty. In the absence of strong news drivers, traders and institutional investors prefer to hold positions and wait for clearer signals.
Ahead of the release of important macroeconomic data, market participants are preparing for possible changes. The situation on stock markets now resembles the calm before the storm: investors are focused on the possible consequences of the employment report, which can set the tone for further market movement.
Thus, the current trading activity, although below the usual level, reflects a mood of caution and prudence, which emphasizes the significance of the upcoming events for the global financial community.
Thursday was a historic day for Bitcoin, which for the first time broke the symbolic barrier of $ 100,000. At the peak of its growth, the largest cryptocurrency was trading around $ 99,400, an increase of 1.5% in a day. This impressive growth reflected the optimistic expectations of market participants related to possible changes in the regulation of the crypto industry in the United States.
A key driver of Bitcoin's latest surge was former President Donald Trump's announcement that he would appoint Paul Atkins to head the Securities and Exchange Commission (SEC). Atkins, known for his liberal views on regulation and support for cryptocurrencies, has become a symbol of hopes for deregulation of the crypto market.
"At the end of the day, it's just a number," said Jeff Kendrick, head of digital asset research at Standard Chartered. However, according to him, the current price level demonstrates the depth of the industry's transformation. "The institutionalization of the industry, especially through the launch of crypto ETFs, has played a key role in achieving these heights," he added.
The approval of exchange-traded funds (ETFs) has been a significant event this year, attracting large capital into the crypto market. This has helped to bolster the confidence of investors who were previously wary of digital assets. Bitcoin is no longer perceived as a purely speculative instrument; it has become part of a larger financial ecosystem.
While Bitcoin was setting records, global stock markets remained close to all-time highs, despite a minor correction. Investor confidence was fueled by expectations of lower interest rates in the US, which creates a favorable backdrop for risk assets.
Bitcoin's historic achievement opens a new chapter in its development. Regulatory issues, institutional investment, and the emergence of new financial products will continue to shape its price. The optimism prevailing in the market suggests that Bitcoin is not just a digital asset, but a game-changer in the global economy.
Thus, Bitcoin's current success underlines the maturity of the industry and strengthens its position as an important element of global financial systems.
France faced a rare political event: Michel Barnier's government lost a vote of confidence on Wednesday for the first time since 1962. Far-right and left-wing parties joined forces to topple the cabinet, which culminated in Barnier's official resignation. However, investors who had foreseen such a development took the news calmly. The euro, French stocks and government bonds were virtually unchanged on Thursday.
Barnier's resignation did not cause volatility in financial markets, thanks to their stable preparation for the political shift. Experts emphasize that investors' attention is focused on other factors - primarily on US monetary policy and the outlook for the global economy.
Amid the Federal Reserve's rate cuts, consumer and investor sentiment in the US continues to improve. Jeff Buchbinder, chief equity strategist at LPL Financial, said the optimism is driven by political and economic factors, including hopes for tax relief, deregulation, and rising corporate profits.
"However, this rally in equities is clouded by overly lofty valuations, overly optimistic expectations, and the possibility of an economic slowdown in 2025," Buchbinder said in a research note.
Financial markets have all but priced in an additional rate cut in 2025. The implied probability of such a move has risen from 0% to 70% in just a week and a half in December. Fed Chairman Christopher Waller has also indicated that he supports the idea of rate cuts, which is bolstering investors' faith in the predictability of the central bank's policy.
U.S. services sector activity slowed in November after months of strong growth, according to the Institute for Supply Management (ISM). These results join a number of other economic signals pointing to possible stagnation in certain sectors of the economy.
The yield on the 10-year Treasury note was little changed despite the release of slightly higher jobless claims data. Investors continue to analyze mixed signals from the economy to predict the future market dynamics.
Political changes in France and economic data from the US create a difficult backdrop for decision-making. Financial markets have demonstrated surprising stability, but participants will be focused on key macroeconomic indicators and policy decisions in the coming months.
Investors are now waiting for the Fed's policy, economic data and international events to determine the trajectory of global markets.
Fresh US labor market data released on Thursday showed a modest increase in jobless claims over the past week, confirming that the US labor market continues to lose momentum. These figures are becoming an important indicator ahead of the monthly employment report, which is expected to set the tone for further decisions by the Federal Reserve.
The US dollar fell against major world currencies, losing about 0.4%. Against this background, the euro strengthened, rising 0.7% to $1,058. Such dynamics indicate that market participants are pricing in a slowdown in the US economy, reducing the attractiveness of the dollar as a safe-haven asset.
Political instability in France, caused by the resignation of the Barnier government, did not put serious pressure on the markets. In contrast, the risk premium for French debt compared to German bonds fell, signaling that investors see prospects for stabilization.
European stock indexes ended the day higher. The pan-European STOXX 600 rose 0.4%, posting a sixth straight session of gains, helped by gains in the banking sector. France's CAC 40 also rose 0.3%, bouncing off a three-week high. Investors are hoping that the formation of a new budget in France after the political crisis will provide a positive boost to the economy.
"The markets have already priced in most of the negative factors, and it was obvious to everyone that the government would collapse," said Francois Savary, chief investment officer at Genvil Wealth Management. According to him, the current stabilization on stock markets reflects investors' expectations that the political crisis will not escalate into economic turmoil.
Markets are bracing for Friday's U.S. employment report, which will be a key factor in the Fed's next steps. In Europe, the key question remains whether France can quickly restore political stability and pass a budget that will boost investor confidence.
So, global markets are showing cautious optimism as they navigate political and economic headwinds, with market participants adapting to the new reality.
South Korean financial markets have shown surprising resilience despite the political crisis that erupted after President Yoon Seok-yeol's failed attempt to declare martial law on Tuesday evening. While markets initially reacted with a surge in volatility, the situation quickly stabilized, reflecting investors' appetite for political risk.
South Korean stocks and the currency showed little change on Thursday, reflecting the market's ability to disengage from domestic instability. Experts note that global economic factors are currently having a greater impact on market sentiment than local political events.
The global oil market was stable on Thursday. Investors were assessing the OPEC+ decision to postpone production increases for three months until April 2025, which supports assumptions about sufficient supply of raw materials in the near future.
The decision of the OPEC+ alliance to postpone the increase in production quotas has generated interest in the dynamics of supply in the global oil market. Experts suggest that the postponed production plans will ensure a balance between supply and demand, preventing sharp price fluctuations.
Investors are also taking into account the impact of the global economic slowdown on energy demand. Despite a potential increase in supply next year, prices remain stable, which underlines confidence in the balance of the market.
Political tensions in South Korea remain in the spotlight, but local financial markets are showing a willingness to cope with short-term shocks. Meanwhile, global oil markets are signaling stability despite the changing supply outlook.
Investors continue to watch OPEC+ moves and developments in South Korea to adjust their strategies amid current uncertainty.
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