United States
Wall Street’s race to new records stalled on Wednesday, with stocks losing their edge after a barrage of posts from President Trump unsettled multiple sectors.
The S&P 500 fell 0.3 per cent after notching its second intraday record of 2026 earlier in the session. The Dow Jones Industrial Average dropped 0.9 per cent, while the Nasdaq 100 struggled to hold onto a small gain.
Defence contractors bore the brunt of Trump’s ire. Northrop Grumman tumbled more than 5 per cent after the President said he would not allow defence firms to issue dividends or buy back stock until they invest more in production and research. Trump demanded executive pay be capped at US$5 million until companies build what he called “new and modern production plants”. Lockheed Martin, RTX, and General Dynamics also fell sharply.
On the economic front, mixed data gave investors plenty to digest. US services activity expanded in December at the fastest pace in more than a year, while ADP data showed hiring rose at only a moderate pace, pointing to sluggish momentum heading into 2026. Treasury yields fell, with the 10-year declining three basis points to 4.14 per cent.
Attention now turns to Friday’s December nonfarm payrolls report and a Supreme Court opinion on the legality of Trump’s global tariffs. Evercore ISI expects the Fed to hold rates steady at its January meeting if the jobs data shows the labour market is bending but not breaking.
Oil refiners bucked the broader weakness after Trump said Venezuela’s interim government had agreed to send up to 50 million barrels of oil to the US. Valero Energy led the sector higher.
In other corporate news, Wolfe Research downgraded JPMorgan Chase and Bank of America, citing limited upside after last year’s rally. Chat platform Discord filed confidentially for an IPO, while AI startup Anthropic is reportedly seeking to raise US$10 billion at a US$350 billion valuation.
Europe
European stocks pulled back from record highs on Wednesday as investors looked ahead to US jobs data.
The Stoxx 600 slipped marginally, with energy and insurance stocks leading the decline. Shell fell 3.4 per cent and BP dropped 3.2 per cent as oil prices weakened on the prospect of increased Venezuelan crude sales.
Insurers and banks were weighed down by falling bond yields as traders increased bets on further European Central Bank rate cuts. HSBC fell 2.2 per cent, while Zurich Insurance dropped 3.3 per cent. Real estate stocks, conversely, benefited from the rate outlook, posting their best session since April 2025.
Defence and construction stocks gained after the Trump administration and Ukraine’s allies moved toward an agreement to offer security guarantees long sought by Kyiv. Rheinmetall rose 4.9 per cent, while Siemens climbed 3.5 per cent to a record close after receiving a new outperform rating from Bernstein.
The healthcare sector closed at its highest level since March 2025, with Barclays saying large-cap pharma stocks have the potential to re-rate roughly 10 per cent this year. Roche gained 2.5 per cent following an upgrade.
Luxury stocks were under pressure, with LVMH falling 2.3 per cent, L’Oréal down 3.4 per cent, and Richemont sliding 2.8 per cent.
Australia
The local market is set for a flat to modestly higher open, with ASX 200 futures pointing to gains of around 0.1 per cent.
BlueScope Steel rejected the $13.2 billion takeover bid from US steelmaker Steel Dynamics and Kerry Stokes-controlled SGH, with chairwoman Jane McAloon saying the company was “worth considerably more than what was on the table”. The $30 per share cash offer represented a significant premium to recent trading levels, but the board was unmoved.
Ansell announced that chief executive Neil Salmon will retire after 13 years with the company. Fiskars Group CEO Nathalie Ahlström has been appointed as his replacement and will begin a transition period on 26 January. Salmon will remain as a special adviser through to June 30.
ASX Limited was upgraded to neutral at UBS with a price target of $54.85.
Iron ore futures traded near US$109 a tonne in Singapore, hitting their highest level since February, on hopes for more easing by China’s central bank and restocking by steel mills ahead of the Spring Festival holidays.
Commodities and currencies
Oil extended its decline on the prospect of increased Venezuelan crude sales. West Texas Intermediate fell 2 per cent to settle just below US$56 a barrel after Trump announced Venezuela’s interim government had agreed to send up to 50 million barrels of oil to the US. The Department of Energy said the US is working with banks and commodity houses to execute trades while dispatching lighter grades of American oil to upgrade Venezuela’s sludgy crude for export.
Precious metals pulled back sharply. Gold fell 0.8 per cent to US$4,457 an ounce, breaking a three-day winning streak, while silver dropped below US$80. Goldman Sachs warned that stunning swings in silver prices are likely to persist and volatility-averse investors should remain cautious, though the bank noted ETF holdings remain below their 2021 peak and investor demand is not overstretched despite last year’s 138 per cent rally.
Copper retreated from its all-time high set earlier in the week.
In contrast, iron ore surged 2.4 per cent to US$109 a tonne, supported by hopes for further Chinese stimulus and seasonal restocking demand.
The Australian dollar eased 0.2 per cent to US67.27 cents. Bitcoin fell 1.2 per cent to around US$91,000.
Economic Calendar
AU:
- Trade Balance 11:30
EU:
- Consumer Confidence 21:00
- Unemployment Rate 21:00
US:
- Initial Jobless Claims 00:30
- Continuing Claims 00:30
- Trade Balance 00:30
- Wholesale Inventories 02:00
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
