Economic News and Market Performance Highlights

Economic News and Market Performance Highlights

U.S. retail sales grew slower than expected last month, impacted by a decline in the volatile building materials storessegment, according to the U.S. Census Bureau. Despite the slowdown, analysts at BMO noted the consumer and retail sectors have shown resilience since the Federal Reserve began cutting interest rates in September. BMO added, "Strong fourth-quarter retail sales growth supports the Fed’s stance to hold the federal funds target rate steady on January 29 as it awaits more clarity on tariffs and the future trajectory of inflation."

Meanwhile, U.S. homebuilder confidence rose unexpectedly in January, despite cooling expectations tied to higher mortgage rates, as reported by the National Association of Home Builders and Wells Fargo.

In manufacturing, the U.S. Mid-Atlantic region saw a significant surge in activity this month. A survey from the Philadelphia Fed revealed orders swung positive, and shipments rose sharply, reaching a multiyear high.

On the labor front, weekly unemployment claims increased more than anticipated, while continuing claims declined, according to the Department of Labor.

In the bond market, the U.S. 10-year Treasury yield fell by 3.8 basis points to 4.62%, while the two-year yield declined by 2.3 basis points to 4.24%.

Commodities also reflected mixed trends. West Texas Intermediate (WTI) crude oil dropped 1.7% to settle at $78.70 per barrel. In contrast, gold gained 1.1%, climbing to $2,747 per troy ounce, and silver added 0.2%, reaching $31.60 per ounce.

Fed Governor Christopher Waller hinted at the possibility of multiple rate cuts in 2025 if inflation continues to cool. In an interview with CNBC, Waller stated, "If inflation data stays favorable, I can see rate cuts happening sooner than markets currently expect."