US Stock Market Overview – Stocks Slide as Geopolitics Weighs on Markets

David Becker

US stocks moved lower on Tuesday, with the Dow Industrials underperforming all the major indices. With technology shares moving higher, the Nasdaq finished slightly in the red, but nearly unchanged. Most sectors in the S&P 500 index were lower, driven down by Real-estate shares, energy bucked the trend. The US trade deficit declined by more than expected and hit the lowest levels seen since 2016. The ISM reported there services index which came out better than expected, following last Friday’s release of its manufacturing index which was softer than expected.

Trade Deficit Declines

The US trade deficit narrowed more than expected in November. The shortfall in goods and services declined to $43.09 billion for the month, below the $43.6 estimate. That represented the lowest deficit since October 2016. That was down sharply from $46.9 billion in October, which was revised lower from an initially reported $47.2 billion. The deficit with China decreased $2.2 billion in November to $25.6 billion owing to a $1.4 billion increase in exports and an $800 million decline in imports.

US Mortgage Rates Declined Buoying Home Prices

The 30-year fixed mortgage declined to the lowest level since October this week, at 3.69%. That has an already competitive housing market heating up even more. Home prices are also reflecting the increasing demand for housing. Prices nationally rose 3.7% annually in November, according to a report from CoreLogic.

Services Rose More than Expected

The Institute for Supply Management’s (ISM) non-manufacturing index climbed to 55 last month from 53.9 in November. Expectations had been for a reading to come in at 54.3.  The services reading is a stark contrast from ISM’s manufacturing index, which fell last month to its lowest level since June 2009. Employment in the sector decreased slightly last month from November, while prices were unchanged. Business activity, meanwhile, climbed by 5.6 points to 57.2.

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