Markets in Flux: Resilient US Economy Shakes Stocks Globaly

Global stock markets faced declines as U.S. Treasury yields rose, driven by a resilient American economy. Notably, U.S. services activity increased, and job openings unexpectedly rose in November. Meanwhile, European stocks gained amid considerations of narrower tariffs by Trump's incoming administration.

Global stock markets took a hit on Tuesday as U.S. Treasury yields climbed, reflecting data that underscored a resilient American economy.

The Institute for Supply Management reported an acceleration in U.S. services sector activity for December, surpassing expectations, along with an increase in input prices, nearing a two-year high. While U.S. job openings unexpectedly rose in November, indicators pointed to a potential slowdown in the hiring market.

Major Wall Street indices ended the day lower, with consumer discretionary and technology stocks seeing the most significant losses, whereas sectors like energy and healthcare advanced. European stocks maintained gains amid reports that President-elect Trump's administration might opt for narrower tariffs than anticipated.

"The Trump trade is pausing due to rising bond yields," commented Wasif Latif, Chief Investment Officer at Sarmaya Partners, New York, noting market concerns about how the new administration's planned spending and tax cuts might impact the national deficit.

Among the stock indexes, the Dow Jones fell by 0.10%, the S&P 500 by 0.74%, and the Nasdaq by 1.50%. Meanwhile, the European STOXX 600 showed a 0.32% increase for the second day in a row, rallied by gains in automaker shares following tariff news.

Benchmark U.S. Treasury yields reached an eight-month high, influenced by economic resilience, with 10-year notes at a peak yield not seen since April. The dollar appreciated against key currencies, reaching a near six-month high against the yen.

Oil prices surged due to anticipated supply restrictions from Russia and Iran amid Western sanctions and increased Chinese demand expectations. Brent crude futures rose by 0.89%, and U.S. West Texas Intermediate by 0.87%. Gold also saw gains, with spot prices increasing by 0.66%.

(With inputs from agencies.)