Treasury 10-year yields steadied around 4.17% having fallen slightly Monday on expectation of Fed rate cuts
by Anand Krishnamoorthy and Alex Nicholson
Stocks declined and the dollar hovered near two-month lows as investors reined in risk ahead of a key US jobs report that will offer clues on the path for interest rates.
Futures for the S&P 500 fell 0.3% and Nasdaq 100 contracts lost 0.4%. European equities were little changed. Brent crude dropped below $60 a barrel for the first time since May and gold pulled back after five days of gains. Bitcoin sank more than 1% before recovering to around $86,000.
The November US jobs report on Tuesday is shaping up to be the main data event for markets in the last full trading week of 2025. A print that reinforces the picture of a sluggish economy could put the stock rally back on track by supporting bets for further rate cuts, while a big miss may spook markets.
“We’ve seen a clear risk-off tone,” said Tareck Horchani, head of prime brokerage dealing at Maybank Securities in Singapore. “Valuation concerns are also creeping in, and with major macro data prints — like today’s jobs report — some funds appear to be reducing beta exposure or locking in gains.”
The report will also include an estimate of October payrolls — figures that were delayed by the federal shutdown. Economists project a 50,000 increase in November payrolls and a 4.5% unemployment rate. The US consumer price index is scheduled for Thursday.
Treasury 10-year yields steadied around 4.17% after edging down on Monday amid bets the Federal Reserve will cut rates twice next year to support the jobs market.
Bullish Outlook
Rate reductions and robust growth have propelled the MSCI All-Country World Index to a gain of almost 20% in 2025, notching a third straight year of double-digit increases.
According to a Bank of America Corp. monthly poll, money managers are confident about the outlook for 2026. Investor sentiment as measured by cash levels, stock allocation and global growth expectations rose to 7.4 in December on a scale capped at 10, the most bullish survey outcome in four-and-a-half years.
In Europe, private-sector activity in the euro area grew less than anticipated in December as Germany’s industrial sector unexpectedly deteriorated.
Brent crude oil slipped as much as 1.6% to $59.60 as indications grow that supply is outpacing demand against the backdrop of efforts to end the war in Ukraine.
European defense stocks fell on the speculation around a possible ceasefire, with Germany’s Rheinmetall AG, the defense sector’s bellwether, dropping as much as 4.6%, and Italy’s Leonardo SpA falling 4.5%.
What Bloomberg Strategists Say...
“While investors will welcome the return of top tier US data points, timing and quality issues will limit their usefulness. ...This will leave the space open for Fed officials to guide markets. Recall, the biggest inflection in Fed pricing in the run up to the December Fed announcement was brought about by Fed’s John Williams.”
— Adam Linton, macro strategist.
Corporate News:
- Nasdaq Inc., the second-largest exchange in the US, is looking for regulatory approval to extend trading hours on its stock venues to 23 hours during the work week.
- Mitsubishi UFJ Financial Group Inc. is nearing a deal to buy a minority stake in India’s Shriram Finance Ltd., the latest foreign bank seeking to build a presence in the world’s most populous country.
- PayPal Holdings Inc. applied to become a bank in the US, looking to take advantage of the Trump administration’s openness to financial-technology companies entering the banking system.
- Ford Motor Co. will take $19.5 billion in charges tied to a sweeping overhaul of its electric vehicle business after struggling for years to make it profitable.
- Gucci owner Kering SA will get $690 million following its sale of a stake in a New York property to French investment fund Ardian as part of the fashion group’s efforts to shrink its debt.
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.3% as of 5:28 a.m. New York time
- Nasdaq 100 futures fell 0.4%
- Futures on the Dow Jones Industrial Average fell 0.2%
- The Stoxx Europe 600 was little changed
- The MSCI World Index fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1758
- The British pound rose 0.3% to $1.3412
- The Japanese yen rose 0.2% to 154.86 per dollar
Cryptocurrencies
- Bitcoin rose 0.2% to $86,394.23
- Ether fell 0.6% to $2,927.24
Bonds
- The yield on 10-year Treasuries was little changed at 4.17%
- Germany’s 10-year yield was little changed at 2.85%
- Britain’s 10-year yield advanced two basis points to 4.52%
Commodities
- West Texas Intermediate crude fell 1.9% to $55.75 a barrel
- Spot gold fell 0.6% to $4,279.75 an ounce
This story was produced with the assistance of Bloomberg Automation.
Copyright Bloomberg News
