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Index Update - Stocks in the US turned lower in afternoon trading as economic data pushed Treasury yields higher, cooling hopes for Fed rate cuts later this year. The S&P 500 dropped 1%, the Dow Jones fell 250 points (-0.6%), and the Nasdaq 100 slid 1.5%. Early gains evaporated after the Institute for Supply Management reported stronger-than-expected growth in the US services sector, reigniting inflation concerns. The 10-year Treasury yield climbed nearly 6 basis points to 4.675%, as investors recalibrated expectations for inflation and interest rates, signaling a tighter economic environment ahead.

Market Movers - In individual stock news, Nvidia dropped more than 5% after hitting record highs, reversing gains spurred by CEO Jensen Huang’s CES keynote on new AI and tech innovations. Tesla slid 4.7% after a downgrade by Bank of America, while Meta shares fell nearly 2% following CEO Mark Zuckerberg’s controversial decision to end the company’s third-party fact-checking program.

Futures Update - Stock futures in the US trimmed early gains and turned flat to lower on Wednesday after CNN reported President-elect Trump is considering declaring a national economic emergency to justify sweeping tariffs on allies & adversaries. The move could use the International Economic Emergency Powers Act to create a new tariff program. While earlier reports suggested Trump might consider more moderate tariffs, he dismissed those claims, reaffirming his stance on aggressive trade policy. Traders are now focused on the upcoming ADP jobs report & FOMC minutes to gauge the Fed’s next move. Meanwhile, the ISM Services PMI showed faster growth and rising prices, fueling inflation concerns and dimming hopes for more Fed rate cuts.

Commodities Update – US stock futures pared early gains and traded flat to lower Wednesday after reports that President-elect Trump is considering declaring a national economic emergency to justify broad tariffs on allies and adversaries, raising concerns over trade policy. Meanwhile, commodities showed mixed moves: WTI crude rose to near $75 per barrel amid tightening global supplies, bolstered by falling US inventories and geopolitical tensions; silver stayed above $30.10 per ounce despite a stronger dollar, driven by safe-haven demand and hopes for China's economic stimulus. Traders are now focused on the ADP report and FOMC minutes to assess the Fed's next steps.

Macro Update - US mortgage rates rose to 6.99% for 30-year fixed loans in the week ending January 3rd, hitting a new high since July, as Treasury yields climbed amid the Fed's hawkish stance and concerns over potential tariffs from the incoming Trump administration. Meanwhile, the DAX slipped 0.4% on US tariff fears and weak German data, with Siemens Energy plunging 6% and the auto sector under pressure after a surprise drop in industrial orders.

Stocks started off Tuesday's trading session with gains but then saw a notable decline as the day continued. By the time the market closed, all major indexes were down, with the tech-heavy Nasdaq suffering the steepest drop. While the averages managed to rebound slightly from their lowest points, they still ended the day in the red. The Nasdaq fell by 375.30 points, or 1.9%, closing at 19,489.68. The S&P 500 dropped 66.35 points, or 1.1%, to end at 5,909.02, and the Dow decreased by 178.20 points, or 0.4%, closing at 42,528.36. From a technical perspective, the S&P 500 is currently hovering near a former resistance level and has pulled back, suggesting possible consolidation and a bearish trend in the short term. The 14-period Relative Strength Index (RSI) remains around the midpoint, indicating a neutral market sentiment. Key levels to monitor include resistance at 5,800 and support at 5,770.

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