US stocks rebound as oil slides after Trump’s remarks

The S&P 500 added 0.2%. The Nasdaq 100 slid 0.2%. The Dow Jones Industrial Average rose 0.6%. Bloomberg

Stocks hovered near session highs as oil sank after President Donald Trump urged OPEC to lower crude prices and said he will push for interest-rate cuts.

A slide in oil, which tends to ease concerns about inflation, also helped push the policy-sensitive two-year yields down. Equities saw mild gains, with the advance curbed by a selloff in chipmakers as a weak outlook from SK Hynix Inc. left investors questioning whether demand for artificial intelligence will live up to sky-high expectations. That caution on the industry spilled over into Europe, where ASML Holding NV tumbled on worries over further US export controls.

Trump said he would 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 gathered in Davos. He also said he would demand an immediate drop in interest rates, which he said had ratched up deficits and resulted in what he cast as economic calamity under the Biden administration.

The S&P 500 added 0.2%. The Nasdaq 100 slid 0.2%. The Dow Jones Industrial Average rose 0.6%. A Bloomberg gauge of the “Magnificent Seven” was little changed. The Philadelphia Stock Exchange Semiconductor Index retreated 1.%. The Russell 2000 advanced 0.2%.

The yield on 10-year Treasuries advanced two basis points to 4.63%. The Bloomberg Dollar Spot Index fell 0.2%. Bitcoin rose 1.6% to $105,707.76.

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.”