Global markets experienced a mixed bag on Monday, December 16th, as investors anticipated the Federal Reserve’s upcoming policy decision. The Nasdaq Composite reached a record high, closing at 20,173.89, a 1.24% increase, while the S&P 500 also saw gains, rising 0.38% to 6,074.08. This positive sentiment was fueled by expectations of a potential rate cut and overall economic resilience. However, the Dow Jones Industrial Average underperformed, closing down 0.25% at 43,717.48. Mixed signals emerged from economic indicators. While the S&P Global services PMI showed strength, rising to 58.5, the NY Empire State Manufacturing Index dropped sharply to 0.20, significantly below expectations, reflecting concerns in the manufacturing sector. This discrepancy highlighted the uneven nature of current economic performance. Most S&P 500 sectors closed lower, with materials, energy, and healthcare leading the decline. Conversely, consumer discretionary and communication services outperformed, demonstrating sector-specific variations in market response.
Looking to Asia, markets presented a varied picture on Tuesday. Japan’s Nikkei 225 experienced a slight decline of 0.13%, closing at 39,410.00, with losses concentrated in shipbuilding, warehousing, and precision instruments. In contrast, Australia’s S&P/ASX 200 showed a positive trend, increasing by 0.78% to reach 8,314.00, driven by gains in industrials, IT, and A-REITs sectors. India’s markets experienced a downturn, with the Nifty 50 falling 1.41% to 24,320.30 and the Nifty 500 decreasing by 1.19% to 23,075.15. China’s Shanghai Composite also fell, closing at 3,361.49 (a 0.73% decrease), while the Shenzhen CSI 300 bucked the trend with a 0.26% increase, closing at 3,922.03. Hong Kong’s Hang Seng ended lower by 0.48%, closing at 19,700.48.
The Eurozone showed signs of moderate growth, with the European STOXX 50 index rising by 0.32%. Germany’s DAX gained 0.18%, France’s CAC increased by 0.28%, but the U.K.’s FTSE 100 lagged, falling 0.75%. Commodities markets displayed a mixed trend. Crude oil prices experienced a decline, with WTI trading down 1.44% at $69.69/bbl and Brent falling 0.72% to $73.39/bbl, largely due to weak Chinese economic data and pre-Fed decision caution. However, natural gas prices rose by 0.65% to $3.235. Precious metals showed weakness; gold fell 0.53% to $2,655.99, silver declined 1.16% to $30.700, and copper dropped 1.14% to $4.1435.
Looking ahead, U.S. futures pointed to a cautious opening, with Dow futures down 0.35%, S&P 500 futures falling 0.25%, and Nasdaq 100 futures slightly lower at 0.04%. The U.S. dollar maintained its strength, rising 0.17% to 107.03 on the U.S. Dollar Index, anticipating the Federal Reserve’s decision. USD/JPY decreased 0.22% to 153.81, while USD/AUD rose 0.47% to 1.5770. The overall market sentiment seems to be one of cautious optimism, balanced by underlying economic uncertainties and the anticipation of significant central bank policy changes. The global economic outlook continues to be shaped by complex interplay between inflation, growth, and monetary policy decisions. Investors are navigating this uncertainty by closely observing key economic indicators and major geopolitical events.
