By Stephen Culp and Alden Bentley
NEW YORK (Reuters) – Wall Street indexes were mixed on Thursday, with benchmark U.S. Treasury yields almost unchanged a day after hitting their highest levels since May in light, post-Christmas trading.
U.S. stocks steadied after the three major indexes slipped in early trading, ending what looked like a “Santa Claus rally” that began earlier this week, in which stocks get a seasonal boost from low liquidity, tax-loss harvesting and investment in bonuses at the end of the year.
Uncertainties surrounding the policies of President-elect Donald Trump have boosted gold prices. That, along with less dovish messages from the Federal Reserve about further rate cuts next year, helped push the yield on the 10-year bond to its highest level since early May.
“There’s little volume and we’re now recouping some earlier losses due to profit taking from Tuesday’s rally,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “I think we’re at the Santa rally, with a little problem on the road today, and it’s probably safe to say that the year-end rally will continue.”
With only a few trading days left in the year, the Nasdaq and Dow have posted gains of 33%, 26% and 14% in 2024, respectively.
The main concerns for 2025 are the extent of the Fed’s monetary easing, Trump’s tariffs and other policies, and various geopolitical tensions.
The number of new claims for U.S. jobless benefits came in slightly below analysts’ estimates, while pending claims jumped to the highest number since November 2021, suggesting that laid-off workers are struggling to find new jobs.
It rose 0.04%, the S&P 500 fell 0.02% and was almost dead.
MSCI’s measure of shares worldwide rose 0.03%, appearing to be on course to end the year with a second straight annual gain of more than 17%, despite escalating geopolitical tensions and economic headwinds.
increased by 1.12 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.14% lower, but remained on track for a weekly gain.
European markets were closed for the second day in a row on Thursday, while London traders got the day off.
It looked set to continue its climb after rising to nearly 4.65% on Thursday from around 4.10% earlier this month.
“We’re probably on our way to 4.75% to 5.0% on the 10-year note, and the reason for that is because the bond market is full of uncertainty, while the stock market is full of enthusiasm,” Cardillo said. “Bond market projects hawkish Fed likely to enter first half of year.”
Weak demand for the benchmark US 10-year bond pushed the yield, which moves in the opposite direction to price, to as high as 4.641%. Strong interest in the seven-year Treasury auction widened in the afternoon, pushing the benchmark yield back to an almost unchanged level of 4.585%.
The yield, which usually moves in step with expected interest rates, was 1.1 basis points higher late Tuesday at 4.341%.
The dollar, loosely following bond yields, slipped against a basket of world currencies. , which measures the dollar against a basket of currencies including the yen and the euro, was down 0.05%, with the euro up 0.02% to $1.0409 and dollar/yen up 0.33% to hit an all-time high value as of mid-July.
Oil gave up earlier gains on China’s hopes for stimulus and an industry report showing lower U.S. inventories.
fell 0.27% to $69.91 a barrel and fell to $73.51 a barrel, down 0.1% on the day.
Gold advanced on safe-haven demand as investors awaited further signals on the health of the US economy.
rose 0.82% to $2,634.29 an ounce. US rose 0.3% to $2,627.90 an ounce.
In cryptocurrencies, bitcoin fell 2.76% to $95,712.62. down 3.92% to $3,328.90.
