Stocks ended Tuesday modestly lower even after minutes from the Federal Reserve’s December meeting reinforced expectations for further interest-rate cuts next year. Silver and gold bounced back after plunging from all-time highs.
The S&P 500 fell 0.1% — down for a third consecutive session — after barely budging for most of the day. Treasury yields climbed, with US 10-year rate around 4.12%. The Bloomberg dollar spot index rose.
Apart from the release of the Fed’s meeting minutes, there has generally been a lack of major catalysts to move markets in recent days, especially as news flow and trading volumes have been muted. A record of the US central bank’s most recent meeting showed that most Fed officials supported further rate cuts if inflation continues to slow over time. But it also highlighted the divisions among policymakers, and how difficult it was for them to lower rates by a quarter percentage point earlier this month.
To keep pushing higher next year, the equity market needs a dovish Fed, Amanda Agati, PNC Asset Management Group’s chief investment officer said on Bloomberg Television on Tuesday.
“I joke that the equity market is like a kid in a candy store, braving a sugar high for more policy accommodation, a more dovish Fed — but it doesn’t know what’s good for it,” she said. “The bond market is the adult in the room taking away the last lollipop. It is maybe the first time in observable market history that we’re seeing the market react to the deficit and debt level concern. I think there’s continued upward pressure on long yields, for sure.”
US President Donald Trump, on Monday, said that he has a preferred candidate to be the next chair of the Fed, but is in no hurry to make an announcement. He also mused that he might fire Jerome Powell.
“I think a firing of a Fed chair in the new year is not something that the market is priced for, but to the extent that we stay a little more dovish and don’t start talking about moving in the opposite direction, the market can probably work through the noise,” Agati said.
Traders on Tuesday also parsed data showing home-price growth in the US ticked up in October.
What Bloomberg strategists say...
“Traders continue to lean closer toward favoring two cuts next year, instead of the three they priced earlier in December. Despite Fed policymakers’ focus on labor market risks, traders are likely awaiting delayed data to corroborate those concerns.”
In a notable development in currency markets earlier, China’s onshore yuan strengthened past the key 7-per-dollar level for the first time since 2023.
A gauge of Asian shares nudged lower while European stocks jumped as rising metal prices boosted miners. Overall, global equities are on track for a third straight annual gain in a year. But the last few days have been lackluster for the cohort.
Tuesday marks the last trading session of the year for many equity markets, including Germany, Japan and South Korea.
“The overriding theme is that global stock indices have lost momentum into year-end,” wrote Kathleen Brooks, research director at XTB. “There are plenty of reasons for this, including decent returns for 2025, and investors waiting to make big trading decisions until after the Christmas break.”
Still, investors have reason to be optimistic heading into the new year. MSCI’s gauge for global stocks has climbed an average 1.4% in January over the last 10 years and advanced in six of those instances, data compiled by Bloomberg showed.
While tariffs and shaky consumer confidence continue to create headwinds for corporate America, they’re set to lift earnings growth for US materials stocks to the highest in five years. Constituents active in the metals and packaging industries are set to get the biggest lift, as trade protections strengthen steel prices and a volume play by consumer goods makers is driving demand for everything from cereal boxes to soda cans.
Silver, Gold
Precious metals continued to be in focus after trading turned volatile in the last few days. Silver recovered most losses after its biggest one-day drop in more than five years. Gold also edged higher after losing more than 4%.
“We could still see a tug-of-war over the next few days in the precious metals before we see how things play out over the near-term,” said Matt Maley, chief market strategist at Miller Tabak + Co.
Among other metals, copper recorded the longest winning run since 2017 in a December rally powered by the prospect of more stress in the supply chain. Nickel hit the highest since March after top producer Indonesia flagged plans to cut supply.
Oil steadied as traders weighed geopolitical tensions from Venezuela to Russia and Yemen against concerns about a global glut.
Corporate Highlights:
Warner Bros. Discovery Inc. plans to once again reject a takeover bid from Paramount Skydance Corp. after the rival media company amended the terms of its offer, according to people familiar with the company’s thinking.
Tesla Inc. took the unusual step of publishing a series of sales estimates indicating the outlook for its vehicle deliveries may be lower than many investors were expecting.
Goldman Sachs Group Inc. is co-leading financing for a Texas project to build private power campuses for artificial intelligence.
Meta Platforms Inc. has agreed to buy Manus, a popular Singapore-based artificial intelligence agent with Chinese roots, in its effort to build a business around its massive AI investment.
Elon Musk’s xAI is planning an expansion of its massive data center complex in Memphis, and has purchased a third building in the area that will bring the company’s artificial intelligence computing capacity to almost 2 gigawatts, the billionaire wrote Tuesday in a post on X.
Ultragenyx Pharmaceutical shares rebounded after the shares hit a record low Monday on study failure. Jefferies analysts say the stock could rebound in 2026 ahead of a late-stage data update.
Consumers using Walmart Inc.’s online services experienced outages earlier Tuesday, leaving them unable to access the retailer’s mobile ordering tools.
Pop Mart International Group Ltd. shares tumbled after media reports of waning reseller demand for its Labubu toys dented investor sentiment.
Citigroup Inc. said it expects to post a roughly $1.1 billion after-tax loss on the sale of its remaining business in Russia to Renaissance Capital.
Artificial intelligence drug discovery startup Insilico Medicine Cayman TopCo jumped 25% in its Hong Kong trading debut on Tuesday, capping a year of investor frenzy over China’s biotech and AI boom.
Stocks
The S&P 500 fell 0.1% as of 4 p.m. New York time
The Nasdaq 100 fell 0.2%
The Dow Jones Industrial Average fell 0.2%
The MSCI World Index was little changed
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro fell 0.2% to $1.1745
The British pound fell 0.3% to $1.3465
The Japanese yen fell 0.2% to 156.45 per dollar
Cryptocurrencies
Bitcoin rose 0.7% to $87,831.96
Ether rose 0.8% to $2,955.83
Bonds
The yield on 10-year Treasuries advanced one basis point to 4.12%
Germany’s 10-year yield advanced three basis points to 2.85%
Britain’s 10-year yield advanced one basis point to 4.50%
Commodities
West Texas Intermediate crude fell 0.2% to $57.98 a barrel
Spot gold rose 0.3% to $4,344.50 an ounce
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