Stocks Rise as Trump’s Remarks Spur Slide in Oil: Markets Wrap
5 days ago
(Bloomberg) -- Stocks hovered near all-time highs as oil sank after President Donald Trump urged OPEC to lower crude prices and said he will push for interest-rate cuts.
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A slide in oil, which tends to ease concerns about inflation, also pushed the policy-sensitive two-year yields down. Almost 300 shares in the S&P 500 advanced, though gains were capped by a selloff in chipmakers as a weak outlook from SK Hynix Inc. failed to inspire artificial-intelligence bulls. That caution on the industry spilled over into Europe, where ASML Holding NV tumbled on worries over further US export controls.
“We continue to expect near-term volatility,” said Mark Haefele at UBS Global Wealth Management. “But we also believe US equities have room to grind higher as growth momentum continues.”
Trump said he would ask ask Saudi Arabia and other OPEC nations to “bring down the cost of oil” and reiterated his threat to use tariffs to bring manufacturing back to the US as he addressed world leaders in Davos. He said he would demand an immediate drop in rates, which he said had ratcheted up deficits and resulted in what he cast as economic calamity under the Biden administration.
The S&P 500 added 0.1%. The Nasdaq 100 slid 0.3%. The Dow Jones Industrial Average rose 0.6%. A Bloomberg gauge of the “Magnificent Seven” slipped 0.2%. The Philadelphia Stock Exchange Semiconductor Index fell 1%. The Russell 2000 rose 0.2%.
The yield on 10-year Treasuries advanced four basis points to 4.65%. The Bloomberg Dollar Spot Index slid 0.2%. The yen climbed, with the Bank of Japan widely expected to raise its benchmark rate Friday by the most in 18 years.
The S&P 500’s recent leg higher missed an important ingredient: inflows from big-money managers. For those betting on a further rally, that’s a welcome development.
A measure of aggregate positioning among rules-based and discretionary investors fell to a two-month low, according to Deutsche Bank AG’s data. And commodity trading advisors cut their long stock exposure to the level last seen in the aftermath of a market rout in August, data compiled by Goldman Sachs Group Inc.’s trading desk show.
From a contrarian perspective, such skepticism bodes well for stock-market bulls because it means more dry powder to buy equities down the road, should the biggest fears fail to materialize.
On the economic front, data showed the number of Americans on benefit rolls climbed to a more than three-year high, while first-time applications for US unemployment insurance edged higher.
“Jobless claims may have surprised slightly to the upside, but they were well within the modest range established in recent months,” said Chris Larkin at E*Trade from Morgan Stanley. “Employment continues to highlight US economic outperformance.”
Corporate Highlights:
American Airlines Group Inc. warned of a surprise loss to start the year as it tries to win back business travelers and battle high costs, disappointing investors following a string of bullish forecasts from other large carriers.
Alaska Air Group Inc. beat Wall Street’s estimates to close out 2024 and forecast a better-than-expected start to the new year, giving the carrier a boost as it plans a significant overseas expansion.
Electronic Arts Inc. warned its financial results would be weaker than expected due to poor sales results of two titles released over the holidays.
General Electric Co. exceeded Wall Street expectations for profit and sales in the final months of the year as the jet engine maker worked through supply-chain limitations and capitalized on a strong maintenance backlog.
Union Pacific Corp.’s quarterly earnings topped Wall Street estimates, and the railroad said it’s 2025 outlook remains the same despite a mixed economic forecast.
Freeport-McMoRan Inc. delivered copper sales projections that missed analyst estimates, taking the shine off better-than-expected fourth-quarter results.
Elevance Health Inc.’s medical costs were lower than expected in the fourth quarter, relieving investor anxiety and helping the insurer meet profit expectations.
ByteDance is exploring a deal to keep TikTok running in the US without selling its operations there, according to board member Bill Ford.
