Stocks opened the first week of December with significant losses, driven by some emerging concerns of exaggerated rate cut speculations within the trading community.
Traders have recently scaled back their expectations for a rate cut in March 2024, as indicated by CME Group’s FedWatch Tool, which now suggests a 56% probability compared to the nearly 65% probability observed on Friday. Additionally, although fed futures reveal that a total of five rate cuts by December 2024 are still more likely than not, investors’ convictions on this outcome have softened somewhat.
Short-term Treasury yields experienced a notable increase, with yields on the 2-year note, which is particularly sensitive to policy changes, surging by 12 basis points to reach 4.67%. As yields rose, long-dated Treasury bonds fell, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) down 0.8%.
These rate adjustments have had a ripple effect on the stock market, with the S&P 500 down by 0.7%, the Nasdaq falling by 1.2%, and the Dow Jones losing nearly 100 points. Interestingly, small-cap stocks were the sole bright spot on Wall Street.
Commodities experienced a significant sell-off driven by a strengthening dollar and rising Treasury yields. Gold, which had reached all-time highs at $2,140 per ounce overnight, saw a sharp decline of 2.3%, while silver tumbled by over 3%.
Additionally, oil prices weakened, with WTI-grade crude trading 1.3% lower at $73 per barrel. Meanwhile, Bitcoin (CRYPTO: BTC) is on a remarkable 4% daily run, amid rising speculation over a Bitcoin ETF approval.
Monday’s Performance Of US Stock Indices
| Index | Performance (+/-) | Value |
| Nasdaq 100 | -1.23% | 15,801.18 |
| S&P 500 Index | -0.70% | 4,564.42 |
| Dow Industrials | -0.23% | 36,178.81 |
| Russell 2000 | +0.70% | 1,808.05 |
The SPDR S&P 500 ETF Trust (ARCA: SPY) fell 0.6% to $456.13.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) eased 0.2% to $362.38.
The Invesco QQQ Trust (NASDAQ: QQQ) tumbled 1.2% to $385.23.
The iShares Russell 2000 ETF (NYSE:IWM) surprisingly rose 0.7% to $186.16, according to Benzinga Pro data.
Chart Of The Day: Bitcoin Shows A 65% Gap To All-Time Highs
Sector, Industry ETFs Performance
Sector-wise, defensive industries like healthcare and consumer staples avoided losses on Monday, and surprisingly, the real estate…
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