The major US stock indices have erased the declines that saw the:

  • Dow down -200.57 points at lows
  • S&P down -26.39 points
  • NASDAQ index is down -115.53 points

The snapshot of the current market shows:

  • D industrial average up +23.51 points or 0.06% at 42551.87.
  • S&P index +7.25 points or 0.12% at 5916.28.
  • NASDAQ index up +5.5 points or 0.03% at 19495.18.

The small-cap Russell 2000 is still negative on the day. It is trading down -18.15 points or -0.81% at 2231.65.

Yields in the US have helped the cause as they are trading now lower at least in the shorter end:

  • 2-year 4.274%, -2.1 basis points
  • 5 year 4.450%, -1.9 basis points
  • 10 year 4.679%, -0.6 basis points.
  • 30 year 4.919%, +0.7 basis points.

Bitcoin remains under pressure and is trading down -$2200 or -2.28% at $94,733. The low price has reached $94,506. The high was at $97,248.

Crude oil is lower after testing its 200-day moving average and finding willing sellers. The price is currently down closed at one dollar at $73.41 (see post here)

Fundamentally, the ADP employment report came in weaker than expectations, but the initial jobless claims were stronger.

Federal Reserve Governor Waller expressed confidence that inflation will continue progressing toward the 2% target, with potential further rate cuts in 2025 depending on inflation trends. He emphasized that the economy remains on solid footing, with no signs of significant labor market weakening in the near term. While recent inflation progress has been slow due to factors such as housing and nonmarket services, base effects and improved data suggest better results ahead in 2025. He also highlighted that geopolitical conflicts and tariffs could present renewed inflationary pressures, but he does not anticipate tariffs to drive persistent inflation or significantly impact monetary policy decisions. Waller noted that long-term yields might include an inflation premium, which the Fed will address, and acknowledged that US deficits could also be contributing to higher yields. He pointed out uncertainties regarding tariffs, asserting that draconian measures are unlikely and their near-term impact on inflation should be minimal. Additionally, Waller suggested that some ongoing service price inflation may reflect lagged wage increases, which should moderate over time.