Wall Street ends Lower as Yields Climb; Crypto Stocks Drop

Stocks

Bond

Summary:

The Institute for Supply Management's survey showed U.S. manufacturing contracted for the ninth straight month in November, as factories dealt with slumping orders and higher prices as the effect from tariffs lingered.

U.S. stocks closed modestly lower on Monday, weighed down by a jump in Treasury yields and economic data that showed tariffs remained a drag on the manufacturing sector, as investors looked toward the Federal Reserve's policy announcement next week.

Wall Street ends Lower as Yields Climb; Crypto Stocks Drop_1

Markets have largely priced in a rate cut from the Fed at the conclusion of its two-day policy meeting on December 10. They are pricing in an 85.4% chance of a 25 basis-point cut, according to CME's FedWatch Tool.

"The market actually is still obviously earnings-driven, we went through earnings season, but now it's the Fed," said Joe Saluzzi, partner, co-founder and head of Equity Market Structure Research and co-head of Equity Trading at Themis Trading in Chatham, New Jersey.

"I see no reason why the uptrend doesn't continue, at least, not as quickly, but maybe more of a grind up to the end of the year."

According to preliminary data, the S&P 500 (.SPX) lost 34.44 points, or 0.50%, to end at 6,814.65 points, while the Nasdaq Composite (.IXIC) lost 88.92 points, or 0.38%, to 23,276.76. The Dow Jones Industrial Average (.DJI) fell 411.46 points, or 0.86%, to 47,304.96. While many policymakers have struck a cautious tone, dovish signals from a few key voting members in recent weeks, along with reports that White House economic adviser Kevin Hassett is a leading contender to succeed Fed Chair Jerome Powell, have heightened expectations for further monetary easing in the months ahead.

Powell is scheduled to speak after the market close but is unlikely to address monetary policy due to the proximity to the central bank's policy meeting.

"I guess they'll look for hints of anything that he could say, but it looks like it's a done deal," said Saluzzi.

Investors are also waiting for a delayed September report on the Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge, due on Friday.

Despite expectations for a cut, U.S. Treasury yields were higher on Monday following weakness in Japanese and European government bonds in the wake of comments from Bank of Japan Governor Kazuo Ueda, who signaled that conditions were aligning for a possible rate hike. Bond yields move inversely to prices.

The rise in yields weighed on S&P 500 sectors such as real estate (.SPLRCR) and utilities (.SPLRCU), which are seen by many investors as bond proxies.

Coinbase (COIN.O) and U.S.-listed shares of Bitfarms were among the crypto stocks that showed significant weakness, as bitcoin stumbled and dropped below $85,000. The crypto market has lost more than $1 trillion in value since hitting a record of around $4.3 trillion, according to CoinGecko.

Strategy (MSTR.O), the world's largest holder of the cryptocurrency, ended lower after tumbling as much as 12% during the session. It cut its earnings forecast for 2025, citing a weak run in bitcoin.

Big-box retailers were in focus on Cyber Monday, with shoppers expected to spend $14.2 billion online, according to Adobe Analytics. Shares of Walmart (WMT.N) and Target (TGT.N) both advanced modestly.

Synopsys (SNPS.O) jumped after AI chip leader Nvidia (NVDA.O) said it had invested $2 billion in the semiconductor design software provider.

Source: Reuters

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Manuel

Commodity

Political

Oil prices rose more than 1% on Monday following drone attacks by Ukraine, the closure of Venezuelan airspace by the United States, and OPEC's decision to leave output levels unchanged in the first quarter of 2026.

Brent crude futures settled at $63.17 a barrel, up 79 cents, or 1.27%. U.S. West Texas Intermediate crude finished at $59.32 a barrel, up 77 cents, or 1.32%.

"The market is very nervous at the moment because of possible loss of Russian crude supply," said John Kilduff, partner with Again Capital LLC. "They're watching very closely to see if this Russia-Ukraine deal is going to go off the rails."

Concerns about a possible conflict between the United States and Venezuela run far behind the focus on the war in Ukraine.

"I don't think anyone is too worried about the loss of supply from Venezuela," Kilduff said.

Phil Flynn, senior analyst with Price Futures Group, said Ukraine's attacks combined with OPEC production commitments drove up prices in morning trade in New York.

"Ukrainian drone attacks on Russian shadow fleet as well as a commitment by OPEC to maintain current production levels has the market in an optimistic state," Flynn wrote in a morning note. "This comes as global oil demand continues to rise despite the negativity that we continue to hear on the demand side of the equation."

The Caspian Pipeline Consortium, which carries 1% of global oil, said on Saturday that one of the three mooring points at its Novorossiysk terminal had been damaged, halting operations. But Chevron, a CPC shareholder, said late on Sunday that loadings were continuing at Novorossiysk. Usually, two moorings are engaged in loadings, while one is used as a backup.

The attacks on the CPC export terminal drove oil prices higher, UBS analyst Giovanni Staunovo said.

They came as Ukraine stepped up its military operations in the Black Sea and hit two oil tankers headed for Novorossiysk.

Meanwhile, the Organization of the Petroleum Exporting Countries and its allies initially agreed on a pause in early November, slowing a push to regain market share with looming fears of a supply glut.

LSEG senior analyst Anh Pham said the market was reacting positively to the news.

"For some time, the narrative has centered on an oil glut, so OPEC+’s decision to maintain its production target provided some relief and helped stabilize expectations for supply growth in the coming months."

Brent and WTI crude futures settled lower on Friday for the fourth straight month, their longest losing streak since 2023, as expectations for higher global supply weighed on prices.

On Saturday, U.S. President Donald Trump said "the airspace above and surrounding Venezuela" should be considered closed, sparking fresh uncertainty in the oil market, as the South American nation is a major producer.

Source: Reuters

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Manuel

Cryptocurrency

Nearly $1 billion of leveraged crypto positions were liquidated during another sharp drop in prices on Monday that brought fresh momentum to a wide-ranging selloff that has carried into a third month.

Bitcoin slid as much as 8% to $83,824 in New York, bringing its decline for the year to more than 9%. Ether dropped 10% to as low as $2,719, and is down 18% since last December. The market downturn has been even tougher on smaller, less liquid tokens that traders often gravitate toward because of their higher volatility and typical outperformance during rallies. A MarketVector index tracking the bottom half of the largest 100 digital assets is down almost 70% this year.

The crypto market is on shaky ground after a weeks-long selloff that began when some $19 billion in levered bets were wiped out in early October as President Donald Trump whipsawed markets with threats of higher tariffs, data compiled by tracker Coinglass show. That was just days after Bitcoin set an all-time high of $126,251. The automated closing of leveraged positions in crypto, such as the major event on Oct. 10, is sometimes referred to as a liquidation cascade.

Traders use liquidation data to assess leverage in the system, spot risk appetite, and gauge whether a market wipeout has truly cleansed excess speculation. But the numbers they rely on may be incomplete. Industry insiders have said exchanges restrict the full liquidation data they share, making it hard for traders to know how much leverage is truly in the system.

“It’s a risk off start to December,” said Sean McNulty, APAC derivatives trading lead at FalconX. “The biggest concern is the meagre inflows into Bitcoin exchange traded funds and absence of dip buyers. We expect the structural headwinds to continue this month. We are watching $80,000 on Bitcoin as the next key support level.” Crypto Downturn Wipes Out Nearly $1 Billion in Levered Bets_1

Crypto Downturn Wipes Out Nearly $1 Billion in Levered Bets_1

Digital assets also felt the broader macro shifts rippling through global markets, as equity traders in the US start the week on the backfoot. Japanese stocks fell and the yen rose as Bank of Japan Governor Kazuo Ueda sent the clearest hint yet of a rate hike this month.

“As December kicks off, investors are focused on the path forward for global monetary policy,” said Karim Dandashy, an over-the-counter trader at crypto trading firm Flowdesk. “With the Fed now expected to be cutting again after a brief panic last week that saw December odds drop to 30%, and now the BOJ looking more likely to be raising rates to counter the moves we’ve seen in JGBs.”

On Monday, Michael Saylor’s Strategy Inc. said it had created a $1.4 billion reserve to fund future dividend and interest payments, in a bid to temper fears that the Bitcoin accumulator may be forced to sell some of its roughly $56 billion cryptocurrency haul if token prices continue to fall.

The company’s mNAV — a key valuation metric comparing the firm’s enterprise value to the value of its Bitcoin holdings — sat at about 1.11 on Monday, according to its website, spurring investor fears it may soon turn negative. If that were to happen, its CEO Phong Le had suggested last week that the firm could sell some of its Bitcoin. Shares of Strategy tumbled more than 10% on Monday, and are now down around 66% since reaching an all-time high in November 2024.

Meanwhile, US spot Bitcoin ETFs took in a modest $70 million last week, after roughly $4.6 billion in outflows over the past month, Bloomberg data show. Most of the pressure has come from the iShares Bitcoin Trust, where investors have pulled money for five straight weeks, the longest withdrawal streak since the fund launched in January 2024.

The week ahead is set to offer a crucial snapshot of US economic momentum as policymakers weigh the trajectory of interest rates heading into 2026. Data is likely to shape expectations for whether the Federal Reserve continues its rate-cutting cycle. US President Donald Trump on Sunday said he had decided on his pick for the next Fed chair, after making clear he expects his nominee to deliver interest-rate cuts.

Meanwhile, S&P Global Ratings last week downgraded an assessment of the stability of USDT, the world’s largest stablecoin, to its lowest rating, warning that a drop in Bitcoin’s value could leave the token undercollateralized. Further uncertainty came from the People’s Bank of China, which on Saturday issued a warning about the risks of virtual currencies including stablecoins, adding that government agencies should deepen coordination to crack down on illegal activities.

However, Flowdesk’s Dandashy added that there seems to be “a light at the end of the tunnel” as the market enters the end of the year.

“Whether economic data can get in the way of those expectations right now seems to be most important for a year end risk rally,“ he said.

Source: Bloomberg

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Manuel

Economic

U.S. manufacturing contracted for the ninth straight month in November, with factories facing slumping orders and higher prices for inputs as the drag from import tariffs persisted.

The Institute for Supply Management survey on Monday also showed some manufacturers in the transportation equipment industry linking layoffs to President Donald Trump's sweeping duties, saying they were "starting to institute more permanent changes due to the tariff environment." They added "this includes reduction of staff, new guidance to shareholders and development of additional offshore manufacturing that would have otherwise been ‌for U.S. export."

Trump in May imposed 25% tariffs on more than $460 billion worth of imports of vehicles and auto parts annually, but has since struck deals to reduce those tariffs on some countries. The Republican president has issued some tariff relief since then on parts and ‌engines. A new 25% duty on imported medium- and heavy-duty trucks and parts came into effect on November 1.

"The manufacturing sector continues to be weighed down by the unpredictable tariffs landscape," said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets.

The ISM said its manufacturing PMI dropped to 48.2 last month from 48.7 in October. A reading below 50 indicates contraction in manufacturing, which accounts for 10.1% of the economy. With some manufacturers citing the recently ended U.S. government shutdown, a slight improvement is likely, though factory activity will probably remain subdued.

Import duties have undercut manufacturing, though some segments have been boosted by a surge in artificial intelligence investment. The Federal ⁠Reserve's Beige Book report last week said some of the U.S. central ‌bank's 12 districts reported manufacturing activity increased somewhat, but noted "tariffs and tariff uncertainty remained a headwind."

Only four industries in the ISM survey, including computer and electronic products, and machinery reported growth. Among the industries that contracted were wood products, transportation equipment and textile mills.

Some makers of chemical products said "tariffs and economic uncertainty continue to weigh on ‍demand for adhesives and sealants, which are primarily used in building construction." Manufacturers of miscellaneous goods reported that "business conditions remain soft as a result of higher costs from tariffs, the government shutdown, and increased global uncertainty."

Electrical equipment, appliances and components makers complained about "trade confusion," with others noting that "suppliers are finding more and more errors when attempting to export to the U.S." Some manufacturers of wood products said AI was "producing confusing and most often inaccurate information," adding that "this also causes apprehensive consumer buying patterns, contributing to the challenge of forecasting demand."

The cloud of uncertainty from tariffs is unlikely to clear soon. U.S. Supreme Court justices last month raised doubts over ‌the legality of Trump's tariffs, fueling speculation they would be struck down and cause more chaos, as he is widely expected to shift to other trade tactics in the event of an adverse ruling.

'THE MANUFACTURING SECTOR IS SICK'

Trump has defended the tariffs as necessary to protect domestic manufacturing, though economists have argued it is impossible to restore the industry to its former glory because of structural issues, including worker shortages.

"We can see no sign in this report of a surge in manufacturing in the United States since the tariff regime was unveiled last spring," said Carl Weinberg, chief economist at High Frequency Economics. "The manufacturing sector is sick."

The ISM survey's forward-looking new orders sub-index decreased to 47.4 last month from 49.4 in October. This measure has contracted in nine of the last 10 months. Tariffs have raised prices for some goods, curbing demand. Unfilled orders continued to shrink, though exports improved slightly.

Weak ⁠demand meant less pressure on supply chains, though some machinery manufacturers said "transit time on imports seems to be longer" and their counterparts in the fabricated metal products industry reported "longer lead times" because they reduced "suppliers for raw materials to maintain a better direct cost structure."

The ISM survey's supplier deliveries index fell to 49.3 from 54.2 in October. A reading below 50 indicates faster deliveries.

Despite subdued orders for factory goods, manufacturers paid more for inputs last month, a sign that inflation could remain above the Fed's 2% target for a while. The survey's prices-paid measure increased to 58.5 from 58.‍0 in the prior month.

"This flags ongoing upside risks to ⁠goods prices," said Oren Klachkin, financial market economist at Nationwide. "We see inflation firming a little bit through early next year and losing steam after the impacts of tariffs pass through the data."

Fed officials will meet next week to decide on interest rates. As many as five of the 12 voting policymakers on the central bank's rate-setting Federal Open Market Committee have voiced opposition to or skepticism about cutting rates ⁠further, while a core of three members of the Washington-based Board of Governors wants rates to fall.

The survey's measure of manufacturing employment contracted for the 10th consecutive month. Susan Spence, chair of ISM's Manufacturing Business Survey Committee, noted that "67% of panelists indicated ‌that managing head counts is still the norm at their companies, as opposed to hiring."

"That is not a terribly encouraging signal for blue-collar workers at what is a difficult time for ‌employment prospects," said Shannon Grein, an economist at Wells Fargo.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

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Justin

Commodity

Gold prices are modestly higher in midday U.S. trading Monday and hit a six-week high. Silver is on a tear and hit another record high. Some safe-haven demand for gold and silver is featured to start the trading week and the new month, amid bond market jitters that have originated from Japan. Chart-based buying is also featured in both metals as their near-term technical postures have become more bullish recently. February gold was last up $14.10 at $4,270.20. March silver prices were up $2.012 at $59.22 and hitting a contract/record high of $59.30 and climbing as of this writing.

Global stock markets were mostly weaker overnight. U.S. stock indexes are weaker near midday but up from session lows. There are some worries about Japan's bond market that have traders and investors a bit jittery to start the week.

President Trump on Sunday said he has decided on his pick for the next Federal Reserve chair and expects his nominee to deliver interest-rate cuts. Trump's chief economic adviser, Kevin Hassett, is seen as the likely choice to succeed current Fed chief Jerome Powell, according to people familiar with the matter and as reported by Bloomberg. The person Trump picks will require U.S. Senate confirmation as chair and likely to a 14-year Fed governor term that begins in February if the selection is an outsider. Powell's term ends in May. Hassett as the new Fed chair would be price-friendly for the precious metals.

The key outside markets today see the U.S. dollar index lower. Crude oil prices are firmer and trading around $59.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.1%.

Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.

Technically, February gold futures bulls' next upside price objective is to produce a close above solid resistance at the contract/record high of $4,433.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,000.00. First resistance is seen at $4,300.00 and then at $4,350.00. First support is seen at the overnight low of $4,241.10 and then at $4,200.00. Wyckoff's Market Rating: 8.0.

March silver futures bulls have the strong overall near-term technical advantage. Their next upside price objective is closing prices above solid technical resistance at $60.00. The next downside price objective for the bears is closing prices below solid support at $52.50. First resistance is seen at $60.00 and then at $61.00. Next support is seen at the overnight low of $56.85 and then at $56.00. Wyckoff's Market Rating: 9.5.

Source: Kitco

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Devin

Central Bank

Federal Reserve bank supervisors are monitoring community and regional banks' commercial real estate portfolios amid concerns over "elevated interest rates, tighter underwriting standards, and lower commercial property values," the agency said.

The central bank said those factors may affect borrowers' ability to refinance or pay off their loans, according to a supervision and regulation report released Monday. Officials are monitoring commercial real estate loan trends in addition to closely reviewing underwriting practices and credit loss reserve levels.

Among Wall Street lenders, the agency's watchdogs are monitoring for weaknesses in capital planning and liquidity risk-management practices among such lenders. Still, the Fed report found that the vast majority of banks continued to report capital levels well above applicable regulatory requirements as of the second quarter.

"Stress test results showed that large banks are well positioned to weather a severe recession while maintaining minimum capital requirements and the ability to lend to households and businesses," according to the report.

These areas of focus come as Fed Vice Chair for Supervision Michelle Bowman has urged supervisors to shift their focus to material risks rather than become distracted by process-related items that do not impact a firm's safety and soundness.

US regulators have recently moved to ease several capital requirements and finalized changes last month to its supervisory rating framework for large banks.

Source: Bloomberg Europe

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Golden Gleam

Commodity

Economic

Gold prices rose to a six-week high on Monday, supported by growing expectations of U.S. interest rate cuts and a sliding dollar, while silver struck a record high ahead of key U.S. economic data.

Spot gold was up 0.3% at $4,244.29 per ounce, as of 09:21 AM ET (1421 GMT), its highest since October 21. U.S. gold futures for February delivery gained 0.6% to $4,278.40.Silver was up 1.8% to $57.39 per ounce, after hitting an all-time high of $57.86 earlier.

The U.S. dollar slipped to a two-week low, making gold more affordable for holders of other currencies.

"The underlying environment of expectations of further rate cuts, along with inflationary pressure still above the Fed target... is still the underlying support in gold and silver," said David Meger, director of metals trading at High Ridge Futures.

Traders have increased December rate-cut bets to an 87% probability, following softer U.S. economic data and dovish remarks from Fed officials, including Governor Christopher Waller and New York Fed President John Williams.

Lower interest rates tend to favor non-yielding assets such as gold.

Investors are also focusing on key U.S. data this week, including November ADP employment figures on Wednesday and the delayed September Personal Consumption Expenditures (PCE) Index, the Fed's preferred inflation gauge, due Friday.

Fed Chair Jerome Powell's remarks later on Monday are also expected to offer further policy clues.

Meanwhile, the expectation that the next Fed Chair is going to be more dovish than previous ones is also supporting gold and silver, Meger said.

White House economic adviser Kevin Hassett said on Sunday that, if chosen, he would be happy to serve as the next Fed chairman. Treasury Secretary Scott Bessent indicated a new chair could be named before Christmas.

"We still view gold and silver in a strong sideways to higher uptrend," Meger said.

Among other precious metals, platinu rose 0.3% to $1,677.28, while palladium fell 0.5% to $1,443.75.