Bonds & Stocks
Stocks are ending a third year of double-digit gains in subdued fashion as an expected seasonal rally fails to gain traction. The S&P 500 dipped 0.1% after a stretch of post-Christmas losses pared the benchmark’s advance for 2025 to 17%. Investors have reaped strong returns this year in a market that has been powered by optimism about the vast economic potential of artificial intelligence.
Economy
The dollar is poised for its sharpest annual retreat in eight years and investors say more declines are coming if the next Federal Reserve chief opts for deeper interest-rate cuts as expected. The Bloomberg Dollar Spot Index has fallen 8.1% this year so far, and the US's policy path diverges from some of its developed peers, further dimming the dollar's appeal. The biggest factor for the dollar in the first quarter will be the Fed, and who will be the Fed Chair after Jerome Powell ends his term.
World
Russia and Ukraine struck each other’s Black Sea ports overnight, damaging infrastructure including an oil refinery. A drone attack on the Russian coastal city of Tuapse hit a berth at the port and the local refinery, affecting a crude-processing unit and pipelines. Russian forces struck the port city of Odesa in Ukraine, injuring at least six people and damaging residential properties and infrastructure.