Markets Overview

  • ASX SPI 200 futures little changed at 8,681.00
  • S&P 500 little changed at 6,943.86
  • Dow Average down 0.6% to 49,150.73
  • Aussie down 0.1% to 0.6728 per US$
  • US 10-year yield fell 3.7bps to 4.1358%
  • Australia 3-year bond yield fell 0.8 bps to 4.16%
  • Australia 10-year bond yield fell 3.5 bps to 4.76%
  • Gold spot down 0.8% to $4,456.99
  • Brent futures down 0.9% to $60.16/bbl

Economic Events

  • 11:30: (AU) Nov. International Trade Balance, est. A$5b, prior A$4.39b
  • 11:30: (AU) Nov. Exports MoM, prior 3.4%
  • 11:30: (AU) Nov. Imports MoM, prior 2.0%
  • 16:30: (AU) Dec. Foreign Reserves, prior A$110.5b

Wall Street optimism faded as traders digested mixed economic data and took stock of shifting geopolitical risks amid a flurry of social media posts from the US President. Yields fell across the globe.

The S&P 500 Index slid 0.3% after notching its second intraday record of 2026 on Wednesday while the Nasdaq 100 struggled to hold onto a small gain. Stocks lost their edge after posts from President Donald Trump sent homebuilders and defense contractors tumbling. Valero Energy Corp. led shares of refiners higher after Trump said Venezuela would turn over millions of barrels of oil to the US.

RTX Corp. slid more than 5% after the market closed as Trump threatened to cut ties with its Raytheon defense unit.

His pronouncements “were just the latest examples of the Trump 2.0 White House intervening in the economy in an unprecedented fashion,” said Vital Knowledge’s Adam Crisafulli.

A rally in US Treasuries was dampened after US services activity expanded in December at the fastest pace in more than a year, fueled by solid demand growth and a pickup in hiring. Earlier data from ADP Research was better received by the bond market after it showed hiring in December rose at a moderate pace, pointing to sluggish momentum heading into 2026. The yield on 10-year notes fell to 4.14%, with rates also moving lower across most of Europe.

Altogether, the economic data was positive according to Crisafulli, though drops in both an equal-weighted version of the S&P 500, which gives Dollar Tree Inc. as much clout as Apple Inc., as well as a gauge of smaller firms bear watching.

“The underlying price action is poor,” Crisafulli noted. With two quarter-point rate cuts already baked into swaps traders’ expectations for 2026 the focus will soon turn to Friday’s key December nonfarm payrolls report.

Stocks have been on a tear on optimism over solid earnings growth and inflation remaining sufficiently contained for the Fed to keep cutting borrowing costs. That rosy view has persisted despite a worsening geopolitical backdrop, including US actions in Venezuela, its threats of intervention elsewhere and rising tensions between China and Japan.

To Evercore ISI the recent data indicate the Federal Reserve will hold rates steady at the next meeting.

“If the employment report signals that the labor market is bending but not breaking, the Fed will keep rates on hold at its January meeting, as the bar for an additional near-term cut is higher following the latest cut in December,” Marco Casiraghi wrote.

In addition to a payrolls report, traders will also be watching for the Supreme Court opinion on the legality of Trump’s global tariffs on Friday.

Precious metals pulled back, with silver falling below $80 an ounce and gold breaking a three-day winning streak. Copper retreated from an all-time high.

Oil extended losses after Washington moved to exert greater control over Venezuela’s industry. The US European Command said US forces seized a Venezuela-linked, Russia-flagged ship in the north Atlantic. West Texas Intermediate traded below $57 a barrel.

Investors were also keeping tabs on the primary bond market as the first week of 2026 saw a surge in global issuance, signaling strong confidence despite heightened geopolitical risks.

Issuance in the US investment-grade bond market topped $72 billion in the first two days of the week, the busiest back-to-back sessions on record, according to data compiled by Bloomberg. European borrowers brought a record number of tranches to the market on Wednesday and are set to raise €61 billion ($71.3 billion).