US markets faced another challenging day Thursday, with inflation concerns overshadowing recent gains in the tech sector. The Dow Jones Industrial Average fell, marking its sixth consecutive day of losses, while the S&P 500 declined amid broad-based selling pressure. The Nasdaq Composite slipped, retreating from record highs after a weaker outlook from Adobe and losses in major tech stocks such as Nvidia, Meta, and Alphabet. A hotter-than-expected producer price index (PPI) report, showing wholesale prices rising by 0.4% in November, twice the expected rate, added to investor anxiety. Treasury yields climbed to two-week highs, while mixed signals from inflation data and expectations of a Federal Reserve rate cut next week kept markets on edge.

Key Takeaways:

  • Dow Falls Over 200 Points Amid Inflation Concerns: The Dow Jones Industrial Average dropped 234.44 points, or 0.53%, to close at 43,914.12, marking its sixth consecutive day of losses. The decline was driven by a hotter-than-expected producer price index (PPI) report, which revealed wholesale prices rose 0.4% in November, twice the forecasted 0.2% increase. 
  • Nasdaq Retreats Below 20,000 as Tech Suffers: The Nasdaq Composite slid 0.66%, closing at 19,902.84, slipping back below the critical 20,000 level. Technology stocks were among the largest decliners, with Nvidia losing over 1%, Adobe tumbling more than 13% following disappointing 2025 revenue guidance, and major players like Meta, Alphabet, and Amazon also finishing lower. 
  • S&P 500 Drops Amid Broad-Based Weakness: The S&P 500 fell 0.54%, closing at 6,051.25, as losses spread across most sectors. Inflation concerns, coupled with worries about the Federal Reserve’s next steps, weighed heavily on the index. Notable pressure came from tech stocks, with Adobe leading declines after weaker-than-expected forward guidance. 
  • European Markets Mixed Following ECB and Swiss Rate Cuts: European markets showed muted reactions to the European Central Bank’s (ECB) 25-basis-point rate cut, its fourth this year, taking its key rate to 3%. The pan-European Stoxx 600 ended 0.14% lower, as a 1.7% drop in mining stocks offset gains in the autos sector, which rose 0.87%. The FTSE 100 ticked up by 10.14 points (0.12%) to close at 8,311.76, while the CAC 40 remained flat at 7,430. Germany’s DAX edged higher by 0.13% to 20,426.27. The Swiss National Bank cut rates by 50 basis points earlier in the session, exceeding expectations and adding to a day of global monetary policy shifts.
  • Asia Markets Rise Amid Mixed Signals on Inflation and Employment: Asia-Pacific markets presented a mixed picture on Thursday. Japan’s Nikkei 225 gained 1.21%, closing at 39,849.14, while the broader Topix rose 0.86% to 2,773.03. South Korea’s Kospi surged 1.62% to 2,482.12, while the Hang Seng climbed 1.28% to 20,415. China’s CSI 300 rose 0.99% to 4,028.5, buoyed by optimism over monetary policy for 2025. In Australia, the unemployment rate fell to an eight-month low of 3.9%, but the S&P/ASX 200 declined 0.28% to close at 8,330.3. Meanwhile, India’s headline inflation softened to 5.48% in November, down from 6.21% in October, providing a brief reprieve from recent 14-month highs.
  • Wholesale Prices Rise More Than Expected, Fuelling Inflation Worries: The US producer price index (PPI) showed a 0.4% increase in November, double the 0.2% forecasted by economists. On an annual basis, the PPI rose 3%, marking the largest increase since February 2023. Core PPI, which excludes volatile food and energy prices, rose 0.2%, in line with expectations. However, within the food category, certain prices skyrocketed, including a 54.6% surge in chicken egg prices and notable increases across fresh fruits and poultry.
  • Oil Prices Edge Lower on Supply Forecasts: Brent crude fell 11 cents, settling at $73.41 per barrel, while West Texas Intermediate (WTI) declined 27 cents to close at $70.02 per barrel. Despite optimism surrounding a possible US rate cut, oil prices were pressured by forecasts from the International Energy Agency (IEA) predicting ample supply in 2025. This outlook, coupled with weak demand in China and rising inventories in the US, added to market uncertainties.
  • Treasury Yields Surge After PPI Report: US Treasury yields spiked as the producer price index highlighted persistent inflationary pressure. The 10-year Treasury yield rose by more than six basis points, reaching 4.334%, its highest level in two weeks. Meanwhile, the 2-year Treasury yield climbed over four basis points to 4.199%. The mixed signals from inflation and jobless claims data left investors grappling with the potential impact on Federal Reserve policy, further fuelling volatility in the bond markets.

FX Today:

  • EUR/USD Pressured by ECB Rate Cut: EUR/USD traded lower at 1.0470, losing 0.27% as the pair came under pressure following the European Central Bank’s decision to cut rates by 25 basis points. The pair remains below its 50-day Simple Moving Average (SMA), signalling sustained downside momentum. Immediate support lies at 1.0450, with a break below this level potentially opening the door to 1.0400. On the upside, resistance is seen at 1.0520, with further gains capped by bearish market sentiment.
  • GBP/USD Drops Below Key Level of 1.2700: GBP/USD slid to 1.2672, shedding 0.24% as selling pressure persisted. Mixed economic signals out of the UK combined with a strong US Dollar have kept the pair below its 50-day SMA, indicating a bearish outlook. Support is firmly established at 1.2650, and a break below could see further declines toward 1.2600 and 1.2550. Resistance is seen at 1.2720, followed by 1.2780, where the 100-day SMA currently resides. 
  • USD/CHF Climbs to Multi-Week Highs on Dollar Momentum: USD/CHF rose 0.26% to 0.8914, marking its highest level in weeks as robust demand for the US Dollar continued to push the pair higher. The Swiss Franc weakened following the Swiss National Bank’s larger-than-expected 50-basis-point rate cut earlier in the session. Immediate resistance is at 0.8920, with further upside targeting 0.8950 and the psychological 0.9000 mark. On the downside, support is at 0.8850, and any significant decline below this level appears unlikely as bullish sentiment remains strong.
  • USD/CAD Advances Amid Weak Oil Prices: USD/CAD climbed to 1.4210, gaining 0.13% as the Canadian Dollar struggled under pressure from declining oil prices. Brent crude fell 11 cents to close at $73.41 per barrel, while West Texas Intermediate slid 27 cents to $70.02. The pair remains supported by bullish sentiment, with immediate resistance at 1.4250. A break above this level could open the door to 1.4300. On the downside, support is at 1.4150, followed by the 100-day SMA near 1.4100.
  • Gold Pulls Back After Testing $2,700: Gold prices retreated 0.17% to $2,680 as profit-taking emerged after the precious metal failed to maintain gains above $2,700. Easing inflation concerns and improved global risk sentiment reduced demand for safe-haven assets. Immediate support is at $2,665, with further downside potentially testing $2,640. On the upside, a sustained move above $2,700 could reignite bullish momentum, with resistance at $2,740 and the psychological $2,800 level.

Market Movers:

  • Adobe Plummets on Weak Revenue Guidance: Adobe shares tumbled more than 13% after the company issued a fiscal first-quarter revenue forecast that fell short of expectations. Adobe projected revenue between $5.63 billion and $5.68 billion, missing analysts’ consensus estimate of $5.73 billion. The disappointing outlook prompted a sharp selloff, erasing significant gains from earlier in the year.
  • Warner Bros. Discovery Surges on Restructuring News: Warner Bros. Discovery shares soared 15% after the company announced plans to restructure its business by separating its linear and streaming segments. The move is expected to streamline operations and enhance profitability, boosting investor confidence in the company’s future growth potential.
  • Celsius Holdings Jumps on Positive Analyst Coverage: Celsius Holdings gained 7.5% after JPMorgan initiated coverage of the energy drink maker with an “overweight” rating. The investment bank cited lighter inventory levels and a potential reacceleration in growth as key drivers for a rebound, further fuelling optimism among investors.
  • Oxford Industries Declines on Weak Guidance: Oxford Industries shares fell more than 8% after the apparel and footwear company issued disappointing fourth-quarter earnings guidance. The company projected EPS between $1.18 and $1.38, significantly below analysts’ expectations of $1.55.
  • ServiceTitan Soars on Nasdaq Debut: ServiceTitan shares skyrocketed more than 40% in their debut on the Nasdaq. The cloud software company’s initial public offering (IPO) was priced at $71 per share, exceeding the top end of its expected range. The strong debut, under the ticker “TTAN,” reflected robust investor interest in the firm’s growth potential.

As the day draws to a close, markets remain on edge following a hotter-than-expected producer price index report that reignited concerns about inflationary pressures and their potential impact on Federal Reserve policy. The Dow Jones marked its sixth consecutive day of losses, while the Nasdaq retreated from record highs, weighed down by a sharp selloff in tech stocks like Adobe. European markets showed muted reactions to central bank rate cuts, while Asian markets displayed mixed performances amid local economic developments and global inflation worries. Oil prices edged lower on supply forecasts, while Treasury yields climbed on inflation data, reflecting the lingering uncertainty across financial markets. With the Federal Reserve’s next policy meeting approaching and crucial US economic data still to come, investors are bracing for further volatility in the days ahead.