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Index Update

On Wednesday, the Dow dropped 1,123.03 points (2.58%), marking its longest losing streak since 1974, while the S&P 500 and Nasdaq fell by 2.95% and 3.56%, respectively. The decline followed the Federal Reserve's quarter-point rate cut and its announcement of fewer rate reductions next year—now projecting only two cuts in 2025, down from four previously expected. The Fed also lowered its unemployment forecast and raised expectations for inflation and economic growth, pushing Treasury yields higher. Additionally, market vulnerability, due to stretched positioning and high bullish sentiment, contributed to the selloff.

Market Movers

On Wednesday, the top gainers were  Nukkleus Inc (+53.03%), followed by  CommScope Holding Company, Inc (+31.75%). On the contrary, Corvus Pharmaceuticals, Inc. (-32.34%) and  Norwood Financial Corp (-11.18%) declined the most the same day.

Commodities Update

Brent crude oil futures fell below $73 per barrel on Thursday, driven by the strength of the US dollar, which surged to a two-year high. This was due to the Federal Reserve signaling fewer rate cuts next year, raising concerns about fuel demand. However, oil prices found some support from a decrease in US crude oil stocks, which fell by nearly 1 million barrels in mid-December. Additionally, Kazakhstan announced plans to adhere to OPEC+'s extended oil cuts, joining the UAE. Despite this, expectations of high output from non-OPEC+ countries, such as the US, Canada, and Brazil, limited price optimism.

Macro Update

On Thursday, the yield on the 10-year US Treasury note rose above 4.5%, its highest level in seven months, following the Federal Reserve's 25 basis point rate cut and its revised outlook for 2025. The Fed now expects only two rate cuts next year, down from four previously projected, and updated its economic forecasts, raising GDP and inflation expectations while lowering its unemployment outlook. As a result, markets are anticipating a 94% chance the Fed will keep rates unchanged in January. Treasury prices were also pressured by concerns over higher costs due to President-elect Trump’s tariff threats.

Futures Update

US stock futures stabilized on Thursday following a sharp selloff on Wall Street the previous day, which was sparked by the Federal Reserve's updated outlook for interest rates in 2025.

On Thursday, December 19th, Bitcoin traded at $102,096, up by 1.49% from the previous session. Over the past four weeks, Bitcoin has gained 8.43%, and its price has risen by 135% over the last 12 months.

Stocks began Wednesday's session with modest gains but fell sharply following the Federal Reserve's monetary policy announcement. All major indices ended the day significantly lower, with the Dow extending its losing streak to ten consecutive sessions. The final numbers showed the Dow dropping 1,123.03 points (2.6%) to close at 42,326.87, the Nasdaq sinking 716.37 points (3.6%) to finish at 19,392.69, and the S&P 500 declining 178.43 points (2.5%) to settle at 5,872.12. From a technical standpoint, the S&P 500 experienced a noteworthy decline in the previous trading session, suggesting a potential mean reversion trend in the near term. Furthermore, the 14-period Relative Strength Index (RSI) falling below the midpoint reinforces a negative outlook for the short term. Key levels to watch include resistance at 5,975 and support at 5,790.

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