General Market Analysis – 24/01/25

US Stocks Hit New Highs on Trump Update – Dow up 0.9%

US stock markets jumped to fresh record levels in trading yesterday after President Trump called for rate cuts from the Federal Reserve. The Dow powered up 0.91%, the S&P 500 notched a new record close after rising 0.53%, and the Nasdaq added 0.22%. The dollar dropped back but remained within tight ranges against the majors, with the DXY falling 0.12% to 108.12.

US Treasury yields experienced a mixed day, with the 2-year yield falling 1.1 basis points to 4.287%, while the longer-dated 10-year yield gained 3.3 basis points, moving up to 4.644%. Oil prices fell again following Trump’s speech, with Brent crude down 1.49% to $77.82 and WTI falling 1.62% to $74.22. Gold drifted slightly lower from recent highs, closing down 0.11% at $2,753.87 per ounce.

Oil Continues to Fall in Slippery Conditions

Oil prices took another step down in trading yesterday after Donald Trump called for prices to pull back across the globe. WTI is now down just over 8% from its 2025 high, which it reached just six days ago. There is no doubt that President Trump has played a significant role in the recent moves, having declared a national energy emergency earlier in the week, followed by last night’s call to the market.

WTI is now trading in the middle of recent ranges, with traders anticipating further downside unless there is a sharp change in underlying fundamentals. Resistance is now seen around the $80 level, while support sits close to $70. Traders expect fast and volatile moves within this range until more clarity emerges on the new government’s policy implementations and further updates from the global market.

Busy Trading Day to End the Week

Today could mark the busiest trading day of the week, with a plethora of key data releases across sessions, including the latest rate decision from the Bank of Japan. The focus will be squarely on Japanese markets this morning, with JPY traders expecting significant volatility surrounding the Bank’s anticipated rate hike.

A raft of flash services and manufacturing PMI figures is due globally, with data releases from France, Germany, the Eurozone, the UK, and the US among others, offering plenty of trading opportunities. Additionally, European Central Bank President Christine Lagarde will speak in Davos during the European session, while the US will release existing home sales data and revised University of Michigan Consumer Sentiment figures later in the day to close out the trading week.

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