Investors Await CPI Amid Fed Uncertainty, Commodity Rebound and Mixed Macro Signals

Index Update:  Investors are awaiting the delayed CPI report for signals on the Fed’s policy outlook after mixed jobs and retail sales data, while energy stocks rose in premarket trading as oil prices jumped on President Trump’s blockade of Venezuelan-linked tankers. Amazon advanced on reports of talks to invest $10 billion in OpenAI, and Netflix gained on speculation that Warner Bros.’ board may favor a buyout bid from the company.

Market Movers:  On Monday, the top gainers were AMC Robotics Corporation. (+101.51%), followed by B. Riley Financial, Inc. (+53.76%). On the contrary, Cadrenal Therapeutics, Inc. (-32.87%), and Duluth Holdings Inc. (-29.39%) declined the most the same day.

Commodities Update:  WTI and Brent crude futures rebounded more than 2% on Wednesday, lifting prices above $56 and $60 per barrel respectively, after U.S. President Donald Trump ordered a blockade of sanctioned Venezuelan oil tankers, following recent seizures and increased U.S. military presence in the region. However, gains may be capped by broader bearish forces, including soft global demand, rising supply from OPEC+ and non-OPEC producers, and optimism around a Russia–Ukraine peace deal that could ease restrictions on Russian oil, leaving crude prices on track for their worst annual performance in seven years. Gold rose above $4,320 per ounce on Wednesday, nearing record highs as cooling U.S. labor market data reinforced expectations of future Federal Reserve rate cuts, with investors now focused on upcoming CPI and PCE inflation readings, while renewed geopolitical tensions added to safe-haven demand. Silver surged past $65 per ounce to fresh all-time highs, supported by a mixed U.S. jobs report, strong industrial and retail demand, tightening inventories, and continued interest in alternative assets amid policy uncertainty, leaving the metal up nearly 130% year-to-date.

Macro Updates:  U.S. mortgage applications fell 3.8% in the week ended December 12, reversing the prior week’s gain, as higher borrowing costs weighed on demand. Both purchase and refinance applications declined, while the average 30-year fixed mortgage rate edged up to 6.38%, with the MBA noting seasonal weakness and investor expectations that the Fed is nearing the end of its rate-cutting cycle.

Bonds Commentary:  The US 10-year Treasury yield held near 4.16%, close to a three-month high, as mixed jobs and retail sales data reinforced expectations that the Fed will stay cautious, with markets still pricing in at least one rate cut next year. Investors are now focused on upcoming remarks from Fed officials and the November CPI report for clearer policy signals.

Dollar Commentary:  The dollar index edged up to around 98.5 on Wednesday but remained near two-month lows, as mixed U.S. labor data failed to alter expectations that the Fed will keep rates on hold in January. Investors now await remarks from Fed officials and the November CPI report, alongside upcoming policy decisions from major global central banks for further direction.

Futures Update:  U.S. stock index futures edged higher on Wednesday, with gains led by the S&P 500 and Nasdaq, as investors assessed softer economic data and awaited remarks from Fed Governor Christopher Waller, following a mixed prior session in which the Dow and S&P 500 declined for a third straight day while the Nasdaq posted a modest gain.

Following the lackluster performance in the previous session, stocks continued to experience choppy trading on Tuesday. The major averages fluctuated throughout the day before ultimately closing near the unchanged line. The S&P 500 declined by 16.27 points, or 0.24%, finishing at 6,800.25. From a technical perspective, the index faced resistance at critical levels and then declined, suggesting the potential for a near-term decline. However, there is also a possibility of consolidation with an upward move. The 14-day Relative Strength Index (RSI) remains around the midpoint, indicating indecision at current levels. Key support is seen around 6,710, with resistance anticipated near 6,933.