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US stocks trade higher as Treasury yields fall

Stocks in New York were propped up by falling US Treasury yields to start the week after the US Treasury said it plans to borrow around USD 55 billion less in the current quarter than in its last estimate from October. Yields on 10-year US government debt were trading just above 4% while yields on 2-year debt were near 4.3% after the announcement. Markets are looking ahead to the Federal Reserve’s (Fed) interest rate decision due on Wednesday as well as a slew of earnings reports from Big Tech this week.

Shane Strowmatt, LGT
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5 minutes
Stock market indices
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In New York, stock indices gained as Treasury yields slipped to start the week. The Dow Jones Industrial closed 0.6% higher and the S&P 500 was 0.8% higher on Monday. The Nasdaq-100 shot up 1% ahead of earnings reports from Microsoft and Google parent company Alphabet expected after the bell on Tuesday. Quarterly figures from Facebook’s Meta Platforms, Apple and Amazon are due on Thursday. Chipmakers will also remain in focus with AMD reporting on Tuesday, following Intel last week, which saw double-digit losses due to an outlook that failed to meet market expectations.

Also in the world of tech, Amazon and robotic vacuum manufacturer iRobot said on Monday that they will not further pursue plans to merge the two companies. The deal had come under regulatory scrutiny and was unlikely to get approval in the European Union. Amazon shares were up about 1.3%, just slightly ahead of the Nasdaq-100 on Monday, while iRobot stocks fell 8.8%.

Looking beyond the tech sector, shares of German pharmaceuticals company Bayer fell 4.9% after a court in the US ordered the company to pay USD 2.25 billion in damages as part of litigation linked to its weedkiller Roundup. Germany’s DAX finished Monday’s session down 0.1% and the Euro Stoxx 50 gained 0.1%.

In the Asia-Pacific region, stock markets were trading in slightly positive territory on Tuesday with the exception of China, where market participants were sorting out the consequences of a court liquidation order for property developer China Evergrande. Hong Kong’s Hang Seng Index fell 2%, while the Shanghai Composite lost 1%. In Tokyo, the Nikkei 225 closed Tuesday’s session with just slight gains after Japan posted a jobless rate of 2.4% in December, the lowest level since January 2023. South Korea’s Kospi also finished just slightly in positive territory. In Australia, the S&P/ASX 200 was up 0.3%.

In geopolitics, tensions in the Middle East increased again with the US vowing revenge for a deadly strike at the weekend against its troops based in Jordan. The drone was launched by Iran-backed militants, causing fear that the regional conflict could expand to include Iran as well. US authorities did not rule out strikes against Iran.

Corporate news in focus: Quarterly figures from Alphabet, AMD, Diageo, Electronic Arts, General Motors, Microsoft, Pfizer, UPS.

Economic data in focus: Gross domestic product from the euro area, Germany, France, Italy, Spain; Swiss trade balance; Switzerland’s KOF Economic Barometer; US JOLTS jobs report; Conference Board Consumer Confidence Index.


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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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