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Today on Wall Street, we see a reversal of yesterday's positive sentiment. Investors are selling off stocks in response to better-than-expected ISM data and a strong JOLTS labor market report from the U.S.
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At the time of publication, the US500 and US2000 indices are down 0.70%, while the US100 is trading 1.33% lower at 21,490 points. The declines are driven by a 4% drop in Nvidia and a 3% decrease in Tesla shares. Weakness in the semiconductor sector is also evident with a 3% pullback in Taiwan Semiconductors' shares.
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The dollar resumes its upward trend after a brief pause yesterday. The USDIDX index is up 0.25% today, reaching 108.320 points. EURUSD is down 0.30% to 1.03580, while USDJPY gains 0.11% to 157.770.
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The U.S. ISM Services PMI and JOLTS reports exceeded expectations, strengthening the U.S. dollar and weighing on market sentiment.
- U.S. ISM Services PMI (December): 54.1 (Forecast: 53.5, Previous: 52.1)
- JOLTS Report (November): 8.098M (Forecast: 7.74M, Previous: 7.744M)
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Donald Trump emphasized all his campaign promises during today's interview, supporting the dollar's performance and raising concerns about U.S. protectionist policies.
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A strong selloff reaction to the publication was particularly driven by the very high ISM price index reading, which surged to its highest value since the beginning (64.4; Forecast: 57.5, Previous: 58.2), signaling a potential return of price pressures.
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Thomas Barkin from the Fed stated that the Fed remains determined to bring inflation down to its 2% target, with limited prospects for rate cuts in 2025.
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Donald Trump said the Fed's policy is currently too restrictive, but the dollar did not react to his comments. EURUSD fell 0.2%, retreating below 1.04, while yields on 10-year U.S. Treasury bonds rose nearly 6 basis points to 4.68%.
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Following Trump's speech from Mar-a-Lago, Kalshi's prediction market is pricing in an 80% chance of aggressive tariffs targeting China within the first 48 hours of Trump's administration.
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Nvidia CEO Jensen Huang assured investors that demand continues to exceed available supply and that Blackwell chip production is on schedule. Nvidia also sees significant opportunities in so-called AI agents, but investors are taking profits today, possibly partially due to concerns about potential further export restrictions under the new administration.
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Natural gas futures are down over 6% today amid declining heating demand in the United States. Crude oil is gaining around 1% for both Brent and WTI.
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In the cryptocurrency market, we observe sharp declines far exceeding the stock market sell-off. The reason for this reaction may be the over-leveraging of the market, which was in a very bullish mood yesterday after BTC broke above $100K again. At the time of publication, Bitcoin is down 5.20% to $96,820 and Ethereum is down 7.30% to $3,420
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