The US stock market stumbled on Thursday, kicking off 2025 with a volatile trading session as concerns over valuations and economic resilience weighed on investor sentiment. The S&P 500 extended its losing streak to five sessions, while the Dow and Nasdaq also closed lower despite early gains. Losses in key sectors, including technology and automotives, were only partially offset by strength in energy and chip stocks. As the Federal Reserve maintains a watchful eye on economic data, investors are dealing with mixed signals on jobs, manufacturing, and market liquidity, setting a vigilant tone for the new year.
- S&P 500 Extends Losing Streak: The S&P 500 fell 0.22% to close at 5,868.55 on Thursday, marking its fifth consecutive session of losses and the longest losing streak since April. The decline continues the downturn that began in late 2024, driven by concerns over elevated valuations and mixed economic signals. Despite early-session optimism, the late reversal reflects heightened market volatility as investors brace for a challenging start to 2025.
- Dow Drops Over 150 Points: The Dow Jones Industrial Average lost 151.95 points, or 0.36%, to finish at 42,392.27. While the index climbed over 300 points during early trading, it reversed sharply in the late morning, experiencing an intraday swing of more than 700 points. The blue-chip index's performance highlights persistent investor unease, particularly as economic uncertainties weigh on sentiment.
- Nasdaq Slips Amid Tech Losses: The Nasdaq Composite edged down 0.16% to close at 19,280.79, extending its losing streak to five sessions. Weakness in key technology names such as Apple, which fell 2.6%, and Tesla, which tumbled 6% after missing delivery expectations for 2024, weighed heavily on the index. However, some relief came from Nvidia, which rose 3% to partially offset losses in the broader tech sector.
- European Markets Close Mixed: European equities saw a mixed trading session, with the pan-European Stoxx 600 rising 0.6%, reversing early losses. Gains were driven by oil and gas stocks (+2.3%) and utilities (+1.6%), which helped offset weakness in the banking (-0.3%) and auto (-0.47%) sectors. The UK’s FTSE 100 outperformed, climbing 1.07% to 8,260.09, lifted by a 0.7% month-on-month rise in house prices in December. Germany’s DAX rose 0.58%, benefiting from strong utility performance, while France’s CAC 40 inched up 0.18% amid political uncertainty following President Macron’s acknowledgment of challenges caused by last year’s snap elections. Manufacturing activity continued to contract in Germany (PMI: 42.5) and France (PMI: 41.9), reflecting ongoing economic struggles in the Eurozone's largest economies.
- Asian Markets Mixed as China Leads Losses: Asian stock markets delivered a mixed performance on Thursday, with China’s CSI 300 leading losses, tumbling 2.91% to 3,820.39. Hong Kong’s Hang Seng Index followed, dropping 2.37% amid a 23% plunge in Sun Art Retail shares after Alibaba announced plans to sell its majority stake. In South Korea, the Kospi edged down to 2,398.94, while the Kosdaq gained 1.24% to close at 686.63, bolstered by strength in smaller-cap stocks. Singapore posted annual GDP growth of 4% for 2024, with its economy expanding 4.3% year-on-year in Q4. Australia’s S&P/ASX 200 rose 0.52% to 8,201.2 as investors digested positive growth signals.?
- Volatile Treasury Yields: US Treasury yields experienced choppy trading on Thursday, with the 10-year yield fluctuating between a low of 4.517% and a high of 4.599% before settling at 4.561%. The 2-year yield also moved less than 1 basis point to close at 4.246%. This volatility reflects uncertainty among investors as they weigh the impact of higher rates on equity valuations and economic growth.?
- US Jobless Claims Improve: Initial jobless claims fell to 211,000 for the week ending December 28, a decrease of 9,000 from the previous week and well below the consensus estimate of 225,000. Continuing claims also declined by 52,000 to 1.844 million, marking a retreat from what had been a three-year high. This improvement offers a glimmer of hope for the labour market, even as broader economic uncertainties persist.
- Oil Prices Rally on China Optimism: Oil prices surged as Brent crude futures rose 2% to $76.11 per barrel, and West Texas Intermediate crude gained 2.3% to $73.34. Optimism surrounding China's economic growth and demand for fuel contributed to the gains, alongside President Xi Jinping’s pledge to implement more proactive policies.
- EUR/USD Downtrend Deepens Amid Dollar Strength: The EUR/USD pair continues its downtrend, trading at 1.0262, a decline of 0.89% for the day. The pair has fallen below key psychological levels and is currently testing the lower range of recent support at 1.0200. The pair could see support at the 1.0200 level, with further downside toward 1.0150 if sellers maintain control. On the upside, a reversal above the 1.0300 mark could alleviate some bearish pressure. The immediate resistance is seen at the 1.0370 level, with stronger resistance near 1.0500, where the 200-day SMA resides.?
- GBP/USD Falls as Risk Aversion Grows: GBP/USD dropped by 1.03%, settled at 1.2382, as risk sentiment deteriorated and the US dollar gained broad-based strength. The pair decisively broke below critical support levels, with further downside expected if it breaches 1.2350. Weak UK economic sentiment and a dovish Bank of England stance added to sterling's woes. Resistance is seen at 1.2450, but with persistent dollar strength, short-term rallies may present selling opportunities.
- USD/CHF Rises on Haven Demand: USD/CHF climbed 0.55% to close at 0.9127 as the US dollar strengthened against the Swiss franc. Concerns over a global economic slowdown have bolstered demand for the dollar as a safe-haven asset. The pair has broken above the 200-day SMA, confirming a bullish trend, with resistance at 0.9200 and further upside toward 0.9300 possible. Support remains at 0.9000, a key psychological level.
- USD/JPY Pushes Higher Amid Dollar Momentum: USD/JPY advanced 0.19% to close at 157.61, extending its upward trend as the dollar dominated forex markets. The pair approached resistance near 158.00, a critical level that could open the door to further gains toward 160.00 if breached. Support is seen at 156.00, with bullish momentum indicators signalling the potential for continued upside.
- Gold Gains on Market Uncertainty: Gold prices surged 1.37% to close at $2,659.64, recovering from a period of consolidation. The precious metal benefitted from heightened inflation concerns and equity market volatility, attracting safe-haven flows. Immediate resistance is seen at $2,685, with a potential move toward $2,700 if bullish momentum continues. On the downside, support is solid at $2,600, with further protection at the 100-day SMA near $2,550. Gold’s technical and macroeconomic backdrop remains supportive, favouring an optimistic outlook.
- Tesla Slides on Delivery Miss: Tesla (TSLA) shares plummeted by 6%, closing as one of the biggest losers in the S&P 500 and Nasdaq 100. The company reported Q4 auto deliveries of 495,570, significantly below the consensus estimate of 512,277. The disappointing figures have raised concerns about Tesla's growth trajectory heading into 2025.
- Apple Drops Amid Rising Competition: Apple (AAPL) fell 2.6% after reports indicated the company is offering discounted smartphones in China to combat increasing competition from domestic rivals such as Huawei.?
- Neumora Therapeutics Craters on Failed Study: Neumora Therapeutics (NMRA) shares nosedived by over 81% after its Phase 3 study for navacaprant, a treatment for depression, failed to show statistically significant improvement or meet key secondary endpoints.?
- SoFi Downgrade Weighs on Shares: SoFi Technologies (SOFI) plunged 8% after analysts at Keefe, Bruyette & Woods downgraded the stock to underperform from market perform, setting a price target of $8. The downgrade was driven by concerns over SoFi’s growth prospects and valuation.
- Cloudflare Surges on Double Upgrade: Cloudflare (NET) soared by over 4% after Goldman Sachs issued a rare double upgrade, moving the stock from sell to buy with a price target of $140. The positive outlook boosted investor confidence in the company’s growth potential.
- Cryptocurrency Stocks Climb with Bitcoin Rally: Cryptocurrency-exposed stocks rose on Thursday as Bitcoin climbed by over 2%. Coinbase Global (COIN), Bit Digital (BTBT), MARA Holdings (MARA), and MicroStrategy (MSTR) all gained more than 2%, reflecting the broader optimism in the crypto market.
- Newmont Gains on Gold Surge: Newmont Corp (NEM) advanced by over 3% after gold prices jumped 1.37% to $2,659.64. The company benefitted from increased investor interest in gold as a safe-haven asset amid global market uncertainty.
As the first trading session of 2025 concludes, markets remain caught in a web of uncertainty, marked by sharp intraday reversals and mixed sector performance. The S&P 500 and Nasdaq extended their losing streaks, with disappointing delivery data from Tesla and ongoing weakness in tech stocks dragging indices lower. European markets posted modest gains despite lingering economic challenges, while Asian markets saw mixed results, with significant losses in China offset by resilience in South Korea and Australia. Treasury yields remained volatile, reflecting investor unease over the economic outlook, while gold rallied as a safe haven amid market turbulence. With critical economic data and central bank policy decisions looming, the path ahead remains uncertain, keeping investors on edge as 2025 begins.
