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U.S. stocks moved lower Monday, while Treasury yields and the dollar resumed their recent climb, as investors looked to a busy week on Wall Street that could stoke inflation concerns and add further pressure to the recent global stock slump.
Updated at 11:22 AM EST
United boost
UnitedHealth Group (UNH) shares are driving all of the Dow's early gains Monday following a better-than-expected forecast for Medicare reimbursement rates in 2026.
The U.S. government said late Friday that it will increase Medicare Advantage reimbursement rates by 2.2% next year, that along with a 2.1% boost in 'risk score' will likely contribute to an extra $21 billion in payments to private insurers.
UnitedHealth shares were marked 4.7% higher in mid-morning trading and changing hands at $544.88 each. The move is responsible for around 160 points of the Dow's early advance.
The group will report its fourth quarter earnings before the market opens on Thursday.
earnings for the week of January 13, 2024 https://t.co/hLn2sKQhEY $JPM $TSM $C $UNH $WFC $BLK $GS $APLD $KBH $BAC $AEHR $MS $BK $SLB $USB $RF $JBHT #CVGW $PNC $FHN $INFY $MTB $OZK $SNV $TFC $IIIN $CNXC $FAST $WIT $HOMB $BSVN $RFIL $FUL $STT $CFG $INDB $WBS $KARO $CMTL $SIFY pic.twitter.com/07WQoYUG59
— Earnings Whispers (@eWhispers) January 10, 2025
Updated at 9:37 AM EST
Red open
The S&P 500 was marked 44 points, or 0.76% lower in the opening minutes of trading, while the Nasdaq fell 282 points, or 1.58%.
The Dow, meanwhile, edged 40 points higher while the mid-cap Russell 2000 fell further into correction territory with a 25 point, or 1.16% decline.
S&P 500 Opening Bell Heatmap (Jan 13, 2025)$SPY -0.81% 🟥$QQQ -1.17% 🟥$DJI -0.15% 🟥$IWM -1.22% 🟥 pic.twitter.com/YJt66bZU7u
— Wall St Engine (@wallstengine) January 13, 2025
Updated at 8:53 AM EST
Chip clipped
Nvidia shares are leading U.S. chipmakers lower following a new set of restrictions on AI technology exports unveiled by the White House.
The complicated rules put limits on AI exports to various countries, which are grouped in various tiers, while maintaining the outright bans on sales to Russia, North Korea, Iran and China.
"The US leads the world in AI now -- both AI development and AI chip design -- and it's critical that we keep it that way," said Commerce Secretary Gina Raimondo.
Nvidia shares were last marked 3.3% lower in premarket trading at $131.43 each, with Advanced Micro Devices (AMD) down 1.5% and Broadcom (AVGO) falling 2.3%.
Related: Analyst revisits Nvidia stock price target amid correction slump
Updated at 7:35 AM EST
Crude realities
Global oil prices topped the $80-per-barrel mark for the first time in more than four months following a round of sanctions on the sale of Russia crude unveiled by the White House late Friday.
The new restrictions, put in place as part of a broader package of sanctions tied to Russia's war on Ukraine, cover two oil companies (Gazprom Neft and Surgutneftegas) as well as 183 vessels that form part of what is called a "shadow fleet" of crude exporters.
"The uncertainty over how impactful these sanctions will be is proving bullish for the oil market," said ING's head of commodities strategy, Warren Patterson.
"Potentially, Russia will once again be able to take action to minimise the impact of these latest sanctions," he added. "Furthermore, it is not clear whether the incoming Trump administration in the US will keep these sanctions in place, or if they will be strictly enforced."
Brent crude futures contracts for March delivery, the global pricing benchmark, were last seen trading $1.22 higher on the session at $80.98 per barrel. WTI futures for February, which are tightly linked to U.S. gasoline prices, were last up $1.40 at $77.97 per barrel.
Tougher US sanctions to curb Russian oil supply to India and China Among the newly sanctioned ships, 143 are oil tankers that handled more than 530 million barrels of Russian crude last year, about 42 per cent of the country's total seaborne crude exports.#oott #Russia…
— Giovanni Staunovo🛢 (@staunovo) January 12, 2025
Stock Market Today
The S&P 500 is now running a two-week losing streak, with the benchmark down 0.93% for the year, following a hotter-than-expected December jobs report, which alongside the uncertainty tied to the new administration of President-elect Donald Trump has triggered renewed inflation worries.
Benchmark 10-year Treasury bond yields have largely led the market's concern, rising to a November 2023 high of 4.801% in overnight trading. Two-year notes have risen 17 basis points this year to trade at 4.424%.
"Stocks are struggling to gain traction in the new year. Recent signs of inflation pressure and reduced expectations for Federal Reserve rate cuts have pushed rates to uncomfortably high levels, complicating the macro backdrop," said Adam Turnquist, chief technical analyst at LPL Financial.
"Unfortunately, near-term technical trends point to additional upside risk for Treasury yields," he added. "Based on this backdrop and the current technical setup for the broader market, we believe a deeper pullback remains potentially on the table as market breadth and momentum wane."
ANDREW CABALLERO-REYNOLDS/AFP via Getty Images
The march higher in yields, which both changes the calculation for broader stock prices and offers an attractive, risk-free alternative rate for global investors, is set to face further upward pressure this week in the form or December inflation and retail-sales figures as well as the unofficial start of fourth quarter earnings season.
Around 20 S&P 500 companies will report fourth-quarter updates this week, including JP Morgan Chase (JPM) , Goldman Sachs (GS) , Bank of America (BAC) and UnitedHealth Group (UNH) .
On the macro front, economists are looking for a modest uptick in both core and headline inflation readings for December, while record holiday shopping and travel are likely to lift retail sales close to the $730 billion mark.
Heading into the start of the trading day on Wall Street, stocks are looking at another sharply lower open, with futures contracts tied to the S&P 500 suggesting a 47-point opening-bell decline.
Related: Bonds hammer Fed rate cut bets as inflation greets Trump White House
Futures linked to the Dow Jones Industrial Average, meanwhile, are priced for a 150-point decline while the Nasdaq, which is down 0.77% for the month, is called 245 points lower.
Stocks on the move include Nvidia (NVDA) , which was last marked 3% lower in premarket and set to open at $131.82, a move that would drag the market's second-largest stock into correction territory.
The market's benchmark volatility index, the VIX, is also on the move, rising 20.37% in after-hours trading to $21.74, the highest in nearly a month. At that level, investors are expecting daily swings of around 1.36%, or 79 points, for the S&P 500 over the next 30 days.
More Wall Street Analysis:
- Veteran trader picks battered stock as top stock to buy
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- Veteran fund manager reveals shocking Nvidia stock price target for 2025
Wall Street's Friday slump dragged markets lower. Europe's Stoxx 600 benchmark was falling 0.77% in Frankfurt, with higher oil prices keeping the FTSE 100's decline to around 0.22% in London.
Overnight in Asia, Japan's Nikkei 225 closed 1.05% lower in Tokyo while the regional MSCI ex-Japan index was marked 1.81% lower into the final hours of trading.
Related: Veteran fund manager issues dire S&P 500 warning for 2025
