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Stock rally stalls as Trump remarks hit sentiment

Equity markets lost momentum midweek as comments from US President Donald Trump on property purchases and defence-sector payouts unsettled investors, interrupting the New Year rally on Wall Street. US indices closed mostly lower on Wednesday despite resilient services data and soft but still positive labour indicators, while European stocks eased back from record levels as euro-area inflation moved in line with the European Central Bank’s target. In Asia, shares were trading mostly in the red on Thursday. Gold retreated as traders positioned for sizeable commodity index rebalancing flows and bitcoin retreated to just above USD 90,000.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

Falling market
© Shutterstock

Major US equity indices surrendered early gains and closed lower on Wednesday after Trump unsettled investors with comments on property purchases and defence-sector payouts, interrupting the strong start to the year. The Dow Jones Industrial Average fell 0.9% to 48,996.08 points after record highs in the previous two sessions, while the S&P 500 declined 0.3% to 6920.93 points and the Nasdaq 100 edged up 0.1% to 25,653.90 points, supported by large technology names such as Alphabet, Microsoft and Nvidia, with Intel gaining 6.5%. Trump’s plan to bar large financial investors from buying single-family homes weighed heavily on real-estate-focused firms, while a proposed ban on dividends and share buy-backs at defence companies pushed Northrop Grumman and Lockheed Martin lower by 5.5% and 4.8%, respectively.

US labour data softens despite resilient services

US labour market indicators released on Wednesday pointed to softer demand, with job openings falling to 7.146 million in November from 7.449 million in October and hiring slipping to 5.115 million. Private-sector employment rose by 41,000 jobs in December according to ADP data, reversing November’s loss of 29,000 positions, but missing expectations, with most gains coming from services industries and smaller firms, while wage growth remained moderate. Services activity nevertheless showed resilience in December as the Institute for Supply Management’s Services Purchasing Managers' Index climbed to 54.4 from 52.6, its highest level of last year, supported by stronger new orders, an improving employment component and easing input cost pressures, even as respondents continued to cite tariffs and shutdown-related headwinds. The market expects Friday’s official labour market report to show modest nonfarm payroll growth and a slight decrease in the unemployment rate, following recent data distortions from the federal government shutdown.

Asia stocks slip - chip stocks in focus

Asian equity markets traded mostly lower on Thursday, echoing overnight declines on Wall Street. South Korea’s KOSPI outperformed and reached a fresh record high on strong demand for semiconductor stocks in early trading before later losing steam to trade roughly flat. South Korean technology shares initially led gains after Samsung Electronics projected record fourth-quarter operating profit driven by robust demand for memory chips used in artificial intelligence (AI), but the tech giant's stock was trading down more than 1% later in the session. Peer SK Hynix climbed to new highs on optimism around its high‑bandwidth memory business. Australia’s S&P/ASX 200 was trading 0.3% higher. Data showed the country’s goods trade surplus narrowed to AUD 2.94 billion in November as exports of key commodities such as iron ore and gold declined, which could weigh on growth expectations for commodity‑sensitive markets in the region. Japan’s Nikkei 225 fell 1.6%, mainland China’s CSI 300 declined 0.9% and Hong Kong’s Hang Seng dropped 1.7%. Chinese semiconductor shares rose after a media report said Beijing had asked some domestic technology firms to temporarily halt new orders for Nvidia’s H200 AI chips.

Euro-area inflation returns to 2% target

Euro-area annual inflation is expected to be 2% in December, slightly below 2.1% in November, according to Eurostat’s flash release on Wednesday. Services are expected to remain the main driver of price growth at 3.4%, compared with 3.5% in November, followed by food, alcohol and tobacco at 2.6% versus 2.4%, while non-energy industrial goods inflation eased to 0.4% from 0.5%. Energy prices are projected to decline by 1.9% year-on-year after a 0.5% fall in November, keeping underlying measures of inflation excluding energy and food in a 2.3-2.4% range. European equity markets stalled on Wednesday after their strong start to the year, with the euro-area benchmark EuroStoxx 50 slipping 0.1% to 5924.65 points following three consecutive record closes, as investors turned cautious ahead of US labour market data for December due on Friday. Germany’s DAX bucked the trend with a 0.9% gain to 25,122.26 points and France’s CAC 40 was essentially flat. Switzerland’s SMI also moved marginally lower, closing 0.1% down after briefly touching new highs intraday.

German retail growth slows as labour market stagnates

German retail sales are estimated by Destatis to have risen by 2.4% in real terms in 2025 compared with 2024, with strong gains of 3.8% in the first half of the year easing to 1.1% in the second half, partly due to a one-off boost from a restructuring in internet and mail-order trade that took effect in August of last year, according to data released on Wednesday. Despite the solid annual increase, seasonally adjusted retail turnover in November fell by 0.6% versus October, although it remained 1.1% above the level of November a year earlier, with non-food and online segments outperforming weaker food sales. At the same time, the German labour market showed signs of softening, as seasonally adjusted employment in November was virtually flat versus October at roughly 46 million people, while headcount declined by 0.1% compared with a year earlier. The number of unemployed rose by 11.6% year-on-year to 1.64 million, leaving the seasonally adjusted unemployment rate unchanged at 3.8% in November and extending the downward trend in labour market momentum that has been apparent since July.

Gold and silver ease on index moves

Gold and silver prices fell for a second consecutive session on Thursday as investors positioned for the annual rebalancing of major commodity indices, a process that could trigger the sale of futures contracts worth several billion US dollars in the coming days. Spot gold dropped to around USD 4430 an ounce after losing nearly 1% in the previous session, while silver declined more than 3%. Despite the short-term pressure, both metals are showing limited signs of a deeper correction after delivering their best annual performance since 1979, underpinned by robust central-bank demand, including net gold purchases of 45 tons in November and a 14‑month buying streak by the People’s Bank of China.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: Swiss Consumer Price Index (08:30), Minutes Swiss National Bank (09:30), Euro-area unemployment rate (11:00), US weekly initial jobless claims and US trade balance (14:30) and Canadian trade balance (14:30).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.