On Wednesday, the S&P 500 Index closed down 1.16%, marking a three-week low, while the Dow Jones dropped 0.47% and the Nasdaq 100 fell 1.93%. December E-mini futures for the S&P and Nasdaq also declined, with losses of 1.02% and 1.71% respectively. A notable impact came from a 2% drop in Bitcoin, which negatively affected cryptocurrency-exposed stocks.
Energy producers saw gains as WTI crude oil rose over 1% following an oil blockade on Venezuela announced by President Trump. In contrast, homebuilding stocks struggled, with Lennar forecasting Q1 new orders below expectations. Mortgage applications in the U.S. fell 3.8% in the week ended December 12, as the average 30-year fixed mortgage rate rose to 6.38%.
Key economic indicators to watch this week include expected declines in initial unemployment claims, as well as anticipated increases in existing home sales and consumer sentiment index revisions. The markets are currently pricing in a 24% chance of a 25 basis point rate cut at the upcoming Federal Open Market Committee meeting scheduled for January 27-28.
