Equities Rise to Record Stalls, Bonds Rise – US Market Wrap
Optimism on Wall Street faded as traders digested mixed economic data and reassessed shifting geopolitical risks amid a flurry of social media posts from the US president. Bond yields declined across global markets.
The S&P 500 slipped 0.3% after posting its second intraday record of 2026 on Wednesday, while the Nasdaq 100 struggled to hold a modest gain. Stocks lost momentum after comments from President Donald Trump weighed on homebuilders and defense contractors. Valero Energy led refiners higher after Trump said Venezuela would deliver millions of barrels of oil to the US.
The rally in US Treasuries moderated after data showed US services activity expanded in December at the fastest pace in more than a year, supported by solid demand growth and increased hiring. Earlier figures from ADP were better received by the bond market after showing hiring rose at a moderate pace, pointing to sluggish momentum heading into 2026. The yield on 10-year Treasuries fell to 4.14%, with rates also declining across most of Europe.
Stocks have surged on optimism that earnings growth will remain strong and inflation sufficiently contained to allow the Fed to continue cutting borrowing costs. That upbeat view has held despite a deteriorating geopolitical backdrop, including US actions in Venezuela, threats of intervention elsewhere, and rising tensions between China and Japan.
Alongside the payrolls report, traders will also be watching for a Supreme Court ruling on Friday on the legality of Trump’s global tariffs.
