Equities Mixed, Commodities Rally, and Key Macro Data in Focus

Index Update:  U.S. bank stocks were mixed in premarket trading, with Wells Fargo falling after missing earnings expectations and Bank of America rising on a results beat, while investors awaited Citigroup’s report and reassessed JPMorgan following prior losses. Markets also remained focused on upcoming PPI and retail sales data for inflation and consumer signals, alongside ongoing geopolitical developments in Iran and a potential U.S. Supreme Court ruling on tariffs.

Market Movers:  On Tuesday, the top gainers were Beyond Air, Inc. (+150.00%), followed by TryHard Holdings Limited (+138.31%). On the contrary, Evolution Metals & Technologies Corp. (-42.19%), and flyExclusive, Inc. (-31.62%) declined the most the same day.

Commodities Update:  WTI and Brent crude oil prices rose for a fifth consecutive session on Wednesday, reaching their highest levels since early October, as escalating geopolitical tensions in the Middle East fueled supply concerns. Fears of potential disruptions to Iran’s roughly 3.3 million barrels per day of crude production, amid unrest and possible U.S. involvement, outweighed bearish U.S. inventory data showing a notable increase in crude and fuel stockpiles. Precious and industrial metals advanced sharply on Wednesday, driven by a mix of monetary policy expectations, geopolitical risks, and supply constraints. Gold and silver hit fresh record highs on rising safe-haven demand and growing expectations of multiple U.S. rate cuts this year, amid easing inflation signals, concerns over Federal Reserve independence, and elevated geopolitical tensions. Copper also surged to a record, supported by supply disruptions, tariff-related stockpiling in the U.S., and structurally strong demand from clean energy, electric vehicles, and artificial intelligence, despite the risk of near-term price pullbacks.

Macro Updates:  U.S. Mortgage Rates Hit 15-Month Low, Triggering Sharp Rebound in Loan Demand

U.S. mortgage rates fell to a 15-month low in early January, with the average 30-year fixed rate dropping to 6.18%, driving a sharp rebound in mortgage demand. Applications surged 28.5% week-on-week, led by a 40% jump in refinancing and a strong rise in home-purchase applications, supported by post-holiday dynamics and policy measures aimed at lowering borrowing costs.

U.S. Producer Inflation Seen Moderating as Markets Watch for Tariff Effects

U.S. producer prices are expected to rise modestly in November, with headline and core PPI both forecast to increase 0.2% month-on-month, while annual producer inflation is seen holding near 2.7%. Investors are closely tracking the delayed data for signs of tariff-driven cost pressures, though current expectations suggest such impacts remain limited.

World Bank Lifts Global Growth Outlook on Stronger U.S. Performance

The World Bank has slightly raised its global growth forecasts, projecting GDP expansion of 2.6% in 2026 and 2.7% in 2027, supported largely by stronger-than-expected U.S. growth despite trade disruptions. However, it cautioned that growth remains uneven and insufficient to meaningfully reduce extreme poverty, as gains are concentrated in advanced economies.

Bonds Commentary:  The dollar index edged up toward 99.2, near its highest level since early December, as U.S. inflation data reinforced expectations that the Federal Reserve will keep interest rates unchanged in the near term. Markets largely looked past easing core inflation and concerns over Fed independence, with attention now shifting to upcoming PPI and retail sales data for further economic signals.

Futures Update: U.S. stock index futures moved lower on Wednesday as market participants awaited a new round of earnings from major Wall Street banks alongside additional inflation data. Dow Jones Futures declined by 145 points, or 0.3%, S&P 500 Futures fell 27 points, or 0.4%, and Nasdaq 100 Futures eased 155 points, or 0.6%.

Following an initial period of weakness that largely ended the Monday session on a higher note, stocks exhibited a lack of clear direction throughout Tuesday’s trading day. The major averages fluctuated back and forth around the unchanged line before ultimately closing in negative territory. The S&P 500 declined by 13.51 points, or 0.19%, finishing at 6,963.75. From a technical standpoint, the index faced resistance at key levels and moved lower, suggesting the possibility of a short-term decline. The 14-day Relative Strength Index (RSI) remains above the midpoint, indicating some underlying strength but also signaling potential caution. The main support level is around 6,888—a critical threshold that could prompt a rebound—while resistance is expected near 7,000.