US Market Reaction Amid Rate-Cut Fears; Nasdaq Falls, But Dow Jones Rises 1% On Janaury 13

The US market witnessed a mixed trend on January 13th, with the Nasdaq Composite index closing in red but Dow Jones outperformed its peers. In the early trade of Tuesday, US stock futures edged higher as investors awaited pivotal CPI inflation data that is key in understanding the upcoming rate cut trajectory. The mixed performance of Wall Street is also better than the market rout recorded in Sensex and Nifty on Monday.

US Market Performance On January 13:

Dow Jones: The Dow Jones Industrial Average or DJIA index closed at 42,297.12, higher by 358.67 points or 0.9%. The index even touched an intraday high of 42,319.60.

S&P 500 Index: This index also closed in green but with marginal movement. The S&P 500 index ended at 5,836.22, up by 9.18 points or 0.2%.

Nasdaq Composite Index: The tech-heavy index closed in red at 19,088.10, down by 73.53 points or 0.38%, which was closer to its intraday low of 18,831.91.

On the latest performance, Trading Economics said, in Monday's regular trading, the Dow and S&P 500 gained 0.86% and 0.16%, respectively, while the Nasdaq Composite declined by 0.38%. The shifts came as investors rotated out of mega cap tech stocks and into the energy, materials, and healthcare sectors. The rise in bond yields, particularly the 10-year Treasury yield hitting its highest level since November 2023, put additional pressure on growth stocks.

US Stock Futures:

US stock futures witnessed marginal gains on Tuesday as investors awaited crucial inflation reports this week that are likely to give further clarity on expectations for Federal Reserve policy.

What Is Driving Sentiments?

The US consumer inflation report is scheduled to be released on Wednesday. Trading Economics data said markets are also gearing up for the start of earnings season, with major banks such as JPMorgan Chase, Citigroup, and Goldman Sachs scheduled to release their latest results this week.

Further, Tata Mutual Fund highlighted that the Non-Farm Payrolls data reported stronger-than-expected job additions in December, bolstering the case for a prolonged pause in rate cuts by the Fed. The US economy added 256K jobs in December 2024, the most in nine months, following a downwardly revised 212K in November, and once again beating market forecasts of 160K. Also, the unemployment rate, meanwhile, dipped to 4.1%, compared with expectations of a 4.2% reading.

Additionally, the brokerage highlighted that further the US announced sanctions on Russian oil exports. Due to this, Brent crude prices surged to a four-month
high above $81 per barrel.