Market Monitor January 10th

Highlights

The US stock markets suffered heavy losses after a stronger-than-expected jobs report dashed hopes for quick interest rate cuts. Both the Dow Jones and Nasdaq fell by 1.6%, marking the worst trading day of 2025 so far. Investors now fear a possible rate hike instead of a cut.

Tech stocks like Apple and Nvidia each lost about 3%, partly due to concerns over new chip export restrictions. Meanwhile, oil prices rose above $80 per barrel, benefiting energy stocks like Chevron.

Major Index Performance:

SPY (S&P 500):

• Down -1.5% for the day, with a noticeable decline over the past week (-3.7% for the month). Despite this, the 12-month trend remains positive (+21.78%).

QQQ (NASDAQ-100):

• Dropped -1.6% on the day, showing a similar monthly decline (-2.58%), yet maintaining a strong 12-month performance (+23.84%).

IWM (Russell 2000):

• The weakest among the major ETFs, falling -2.2% on the day and showing a significant monthly loss (-8.39%). Its 12-month performance is still positive (+12.21%).
• The indices reflect a broad-based sell-off across the US equity market, with small-cap stocks (represented by IWM) underperforming larger caps.

Sector Performance

1-Week Sector Trends:

• Real Estate and Consumer Staples were the hardest hit, with Real Estate experiencing the sharpest losses.
• Financials, Information Technology, and Utilities also saw notable declines, highlighting broad market weakness.
• Energy: The sole sector in positive territory for the week, likely driven by the rising oil prices.

1-Month and 3-Month Sector Trends:

• Real Estate and Consumer Staples remain the most negative across both 1-month and 3-month timeframes.
• Over the 3-month period, Information Technology and Industrials show strength, likely due to secular trends supporting tech and industrial growth.

All info available on our Sector Performance page

Market Breadth

Historical Breadth Numbers:

Advancing vs. Declining Stocks:

• On Friday, only 17.8% of stocks advanced, while a significant 80.5% declined, emphasizing the bearish sentiment.

Breadth Moving Averages:

• Only 24% of stocks are above their 50-day moving averages, and 31.9% are above their 100-day averages.
• Long-term moving averages are faring slightly better, with 40.9% of stocks above their 200-day averages.

New Highs vs. Lows:

• A stark contrast is observed, with 5.7% of stocks hitting new highs versus 16.2% hitting new lows, further signaling weakness.

Energy Sector and Oil Impact

Energy Sector Strength:

• Rising oil prices (over $80 per barrel) due to geopolitical concerns and supply disruptions (e.g., sanctions on Russian and Iranian oil) drove energy stocks higher. Chevron (CVX) was among the top performers in the Dow.

All info available on our Market Monitor page

Key Takeaways

• The market faced a sharp sell-off, with small caps underperforming.
• Weakness was broad-based, with Real Estate and Consumer Staples leading the declines.
• Energy was the only sector to show strength, supported by higher oil prices.
• Breadth data and new lows suggest a bearish short-term outlook, although long-term trends remain intact for some sectors and indices.