Global stock markets retreated on Monday, with the U.S. dollar climbing to its highest level in over two years, driven by robust U.S. jobs data that dampened hopes for further interest rate cuts by the Federal Reserve.
U.S. Dollar Strengthens
The dollar index rose by 0.23% to 109.91, peaking at 110.17, reflecting renewed investor confidence in the currency. This surge was fueled by the December U.S. jobs report, which revealed an unexpected addition of 256,000 nonfarm payrolls—far exceeding the forecasted 160,000. The largest gain since March has rekindled inflation concerns and speculation that the Federal Reserve may pause its rate-cutting cycle.
U.S. Treasury 10-year yields touched a 14-month high of 4.799% before retreating slightly to 4.788%.
Stock Market Performance
In the U.S., the S&P 500 fell 0.43% to 5,801.96, while the Nasdaq Composite dropped 1.10% to 18,951.26, weighed down by technology sector losses. However, the Dow Jones Industrial Average rose by 0.46% to 42,131.46, buoyed by gains in industrial stocks.
European and global markets mirrored this trend. MSCI’s global stock index slipped by 0.62% to 828.72, while Europe’s STOXX 600 index dropped 0.44%.
Commodities Show Mixed Results
In the commodities market, U.S. crude oil prices gained 2.42%, closing at $78.42 per barrel, while Brent crude climbed 1.6% to $81.04 per barrel. Conversely, gold prices fell by 0.7% to $2,670.86 per ounce, pressured by the strengthening dollar.
Currency Market Reactions
The strong dollar also impacted currencies, with the euro dropping 0.44% to $1.0199. The dollar showed slight weakness against the yen, trading at 157.56.
Upcoming Economic Indicators
Investor attention is now turning to key U.S. economic data. The Consumer Price Index (CPI) report, due Wednesday, is expected to show a 2.9% annual rise and a 0.3% monthly increase. Producer price data, scheduled for release on Tuesday, will also be closely watched.
Uncertainty Over U.S. Policies
Market analysts attribute ongoing volatility to uncertainty surrounding U.S. President-elect Donald Trump’s proposed economic policies, including potential tariffs, migration reforms, and tax cuts. Rising energy prices have further stoked fears of inflation.
“Investors are concerned that these policies, particularly on tariffs, migration, and taxes, could contribute to persistent inflation,” analysts noted.
Broader Market Sentiment
As reported by FRONTPAGE, global markets faced additional pressure on Thursday due to inflation concerns and a widespread bond selloff, further affecting investor sentiment.
With rising energy prices and potential policy shifts under the new administration, markets are bracing for heightened volatility in the weeks ahead.
