Stocks, Bonds, Dollar Waver as Bessent in Focus: Markets Wrap

(Bloomberg) — Stocks, bonds and the dollar saw small moves, with Treasury secretary nominee Scott Bessent appearing before Senate.

Equities fluctuated, following an almost 2% rally in the S&P 500. Tech megacaps lost steam, while banks were mixed despite solid earnings from Morgan Stanley and Bank of America Corp. Treasuries barely budged, but traded off session lows as Federal Reserve Governor Christopher Waller told CNBC that rate cuts are possible by June if inflation data continues to be favorable. The dollar hovered near two-year highs.

Maintaining the greenback as the world’s reserve asset is critical to US economic health and the nation’s future, Bessent, President-elect Donald Trump’s nominee for Treasury secretary, will tell a Senate committee, according to prepared remarks.

“We know he will consistent with the Robert Rubin model of a strong dollar, even though some dollar weakness would not be bad for exporters,” said Andrew Brenner at NatAlliance Securities. “Nonetheless markets will be looking for clues on tariff speed and future reduction of deficits.”

As traders waded through corporate earnings, Thursday’s economic data was mixed at best. US homebuilders grew less upbeat about sales prospects, while retail sales figures pointed to a consumer that held up well in the holiday season. 

“In the coming weeks, the fourth-quarter earnings season will provide investors with an opportunity to shift some attention from macro to micro data,” said David Lefkowitz at UBS Global Wealth Management. “We continue to have an attractive view on US equities.”

The S&P 500 was little changed. The Nasdaq 100 fluctuated. The Dow Jones Industrial Average lost 0.1%. A gauge of the “Magnificent Seven” megacaps slid 0.9%. The Russell 2000 dropped 0.1%. The KBW Bank Index slipped 0.6%.

The yield on 10-year Treasuries declined two basis points to 4.64%. The Bloomberg Dollar Spot Index wavred. Banks including JPMorgan Chase & Co. and Citigroup Inc. are looking to sell high-grade bonds on Thursday.

Corporate Highlights:

• Morgan Stanley’s fourth-quarter profit more than doubled, boosted by trading revenue that came in well ahead of estimates on volatility tied to the US elections.
• Bank of America Corp. posted fourth-quarter profit that topped analysts’ estimates as investment-banking fees hit the highest in three years and net interest income outperformed forecasts.
• PNC Financial Services Group Inc. and U.S. Bancorp gave muted predictions for net interest income in the first quarter, amid uncertainty over how lower interest rates will revive lending demand.
• UnitedHealth Group Inc.’s elevated medical costs persisted in the fourth quarter and revenue missed estimates.
• Target Corp. raised its sales guidance following a better-than-expected holiday season, but the boost wasn’t big enough to ease investors’ concerns about profitability.
• Reliance Industries Ltd., controlled by billionaire Mukesh Ambani, posted a slightly better-than-expected quarterly profit, as gains from its telecom and retail units offset the volatility in its petrochemical business.
• Taiwan Semiconductor Manufacturing Co. projected quarterly sales and capital expenditure ahead of analysts’ estimates, fueling hopes that spending on AI hardware should remain resilient in 2025.

Key events this week:

• China GDP, property prices, retail sales, industrial production, Friday
• Eurozone CPI, Friday
• US housing starts, industrial production, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 was little changed as of 10:39 a.m. New York time
• The Nasdaq 100 was little changed
• The Dow Jones Industrial Average fell 0.1%
• The Stoxx Europe 600 rose 0.6%
• The MSCI World Index rose 0.1%
• Bloomberg Magnificent 7 Total Return Index fell 0.9%
• The Russell 2000 Index fell 0.1%
• KBW Bank Index fell 0.6%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.1% to $1.0300
• The British pound fell 0.1% to $1.2227
• The Japanese yen rose 0.6% to 155.49 per dollar

Cryptocurrencies

• Bitcoin fell 1.3% to $98,416.64
• Ether fell 3.5% to $3,312.65

Bonds

• The yield on 10-year Treasuries declined two basis points to 4.64%
• Germany’s 10-year yield was little changed at 2.56%
• Britain’s 10-year yield declined three basis points to 4.70%

Commodities

• West Texas Intermediate crude fell 1.6% to $78.74 a barrel
• Spot gold rose 0.8% to $2,717.41 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Sujata Rao, Margaryta Kirakosian, John Viljoen and Chiranjivi Chakraborty.

©2025 Bloomberg L.P.