On the first trading day after Christmas, the U.S. stock market traded sideways with light volume near historical highs, continuing the mild tone of the 'Santa Claus rally,' while funds flooded into the precious metals sector. Silver soared 10% in a single day, joining gold in hitting new historical records, while a glimmer of peace in the Russia-Ukraine conflict dealt a 'Black Friday' blow to oil bulls.
Precious metals erupted again after the holiday, becoming the most eye-catching trading theme in the global market that day. Spot gold rose over 1%, hitting a new intraday high above $4550; silver continued its climb from the previous day, breaking through the $79 mark; platinum also reached a new high, and copper prices remained strong.
Compared to the sharp swings in commodities, U.S. stocks were relatively calm. The S&P 500 index fluctuated slightly throughout the day, closing almost unchanged, but this still locked in its best weekly performance in a month. The Russell small-cap index fell 0.5%, with analysts suggesting that the short-squeeze momentum from earlier in the week had exhausted. Defensive sectors regained favor, while cyclical sectors lagged.
In the bond market, U.S. Treasuries were generally subdued. The 10-year Treasury yield was largely flat around 4.13%, while the 2-year yield edged lower. Overall, the bond market was more 'passively stable,' not showing a clear hedging reaction to the sharp moves in precious metals.
The U.S. dollar index also saw little change, but on a weekly basis, the dollar has been weakening continuously, posting its worst weekly performance since June, which has been a key backdrop supporting the precious metals rally.
As mentioned by Wall Street News, Zelensky stated that he would meet with Trump on Sunday, with a peace framework agreement 'almost ready.' Investors quickly began pricing in the potential consequences of a 'peace deal': if sanctions are lifted, a significant amount of Russian oil could return to an already oversupplied global market.
On Friday, the three major U.S. stock indices edged lower, with the Russell small-cap index leading the losses. The VIX fear index further contracted, closing at 13.47. Tesla fell 2.10%, while Meta, Google A, Apple, and Microsoft dropped up to 0.64%. Amazon edged up 0.06%, and Nvidia gained 1.02%.
U.S. Stock Benchmark Indices:
The S&P 500 index closed marginally lower by less than 0.01% at 6929.94 points. It gained about 1.4% for the week.
The Dow Jones Industrial Average fell 20.19 points, or 0.04%, to 48710.97 points. It rose 1.1% for the week.
The Nasdaq Composite declined 20.21 points, or 0.09%, to 23593.10 points. It advanced 1.2% for the week.
The Russell 2000 index dropped 0.54% to 2534.35 points. It gained 1.06% for the week.
The VIX fear index fell 3.79% to 13.47.
U.S. Stock Sector ETFs:
Oil & Gas fell 0.75%, while Consumer Discretionary, Energy, Financials, Telecommunications, and other sectors declined by up to 0.4%.
(U.S. Stock Sector ETFs on December 26)Magnificent 7 Tech Stocks:
The Magnificent 7 index dipped 0.02% to 210.09 points, rising 1.73% for the week, continuing its overall upward trend.
Tesla closed down 2.10%. Meta, Google A, Apple, and Microsoft fell by up to 0.64%. Amazon edged up 0.06%, and Nvidia gained 1.02%.
Chip Stocks:
The Philadelphia Semiconductor Index fell 0.39% to 5696.21 points.
AMD slipped 0.02%, while TSMC advanced 1.35%.
Chinese Stocks:
The Nasdaq Golden Dragon China Index rose 0.72% to 7688.52 points.
- Among popular Chinese stocks, XPeng gained 6.2%, Nio rose 4.1%, Li Auto increased 3.9%, Xiaomi advanced 2.1%, and Alibaba climbed 1.4%.
Other Individual Stocks:
Berkshire Hathaway Class B shares fell 0.61%, while Eli Lilly edged up 0.07%.
Qualcomm was flat with a 0.02% gain, Adobe rose 0.23%, Oracle advanced 0.25%, Salesforce increased 0.31%, Broadcom gained 0.55%, and Netflix climbed 0.89%.
Crude oil fell sharply, with WTI crude dropping over 2.7%.
Crude Oil:
WTI February crude futures fell $1.61, or 2.76%, to settle at $56.74 per barrel.
(Sharp Decline in WTI Crude Futures)
Brent February crude futures fell 2.57% to settle at $60.64 per barrel.
Natural Gas:
NYMEX January natural gas futures settled at $4.3660 per million British thermal units.
