By Stephen Culp and Alden Bentley
NEW YORK (Reuters) -Wall Street indexes were mixed on Thursday and U.S. benchmark Treasury yields were hardly changed on the day after scaling the highest levels since May in light, post-Christmas trading.
U.S. stocks steadied after the three major indexes slipped in early trading, interrupting what looked like a “Santa Claus rally” shaping up early this week, in which shares get a seasonal boost from low liquidity, tax loss harvesting and investment of year-end bonuses.
Uncertainties around President-elect Donald Trump’s policies lifted gold prices. This, along with the Federal Reserve’s less dovish messaging about lowering rates further next year, helped elevate the 10-year Treasury yield to its highest since early May.
“It’s light volume and now we are recovering some earlier losses due to some profit taking from Tuesday’s rally,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “I think we’re in the Santa Claus rally, with a little bit of a bump in the road here today, and it’s probably safe to say the year-end rally will continue.”
With only a handful of trading days remaining in the year, the Nasdaq, and the Dow have scored respective gains of 33%, 26% and 14% in 2024.
The major concerns for 2025 are the extent of the Fed’s monetary easing, Trump’s tariffs and other policies, and various geopolitical tensions.
New U.S. claims for unemployment benefits came in slightly below analysts’ estimates, while ongoing claims jumped to their largest number since November 2021, suggesting laid off workers are having increasing difficulty finding new jobs.
The edged up 0.04%, the S&P 500 was off 0.02% and the was about dead flat.
MSCI’s gauge of stocks across the globe was up 0.03%, appearing on course to wrap up the year with a second consecutive annual gain of more than 17%, unfazed by escalating geopolitical tensions and economic headwinds.
rose 1.12%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.14% lower but remained on track for a weekly gain.
European markets were closed for a second straight day on Thursday, while London traders got Boxing Day off.
The looked set to extend its climb after rising to almost 4.65% on Thursday from around 4.10% early this month.
“We’re probably on the way to 4.75% to 5.0% on the 10-year note and the reason for that is that the bond market is full of uncertainties, while the stock market is full of enthusiasm,” Cardillo said. “The bond market is projecting a hawkish Fed going into probably the first half of the year.”
Weak demand for the benchmark U.S. 10-year note pushed the yield, which moves in the opposite direction of the price, as high as 4.641%. Strong interest in a Treasury auction of seven-year notes spilled over in the afternoon, nudging the benchmark yield back down to almost flat for the day at 4.585%.
The yield, which typically moves in step with interest rate expectations, was 1.1 basis points higher than late Tuesday at 4.341%.
The dollar, loosely tracking bond yields, slipped against a basket of world currencies. The , which measures the greenback against a basket of currencies including the yen and the euro, eased 0.05%, with the euro up 0.02% at $1.0409 and dollar/yen up 0.33%, having hit the highest since mid July.
Oil gave up earlier gains due to China stimulus hopes and an industry report showing lower U.S. inventories.
fell 0.27% to $69.91 a barrel and fell to $73.51 per barrel, down 0.1% on the day.
Gold advanced on safe-haven demand as investors awaited further signals on the U.S. economy’s health.
rose 0.82% to $2,634.29 an ounce. U.S. rose 0.3% to $2,627.90 an ounce.
In cryptocurrencies, bitcoin fell 2.76% to $95,712.62. declined 3.92% to $3,328.90.
