A tip jar at a cafe in Brooklyn, New York, USA, Friday, August 23, 2024.
Yuki Iwamura | Bloomberg | Getty Images
This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Inflation worries weigh on U.S. markets
U.S. stocks fell and Treasury yields rise On Tuesday, the ISM services index showed Prices rise sharply December. European regional Stoke 600 index Add 0.32%. shares Volvo Cars Swedish automaker closes up more than 9% report Set a new global sales record in 2024.
Meta ends fact-checking program
Yuan Tuesday declare it will Cancel its third-party fact-checking process In order to “restore freedom of speech” and move to a “social notes” model, similar to the system on Musk’s X platform. Criticize company decisionsproduced two weeks before the inauguration of US President-elect Donald Trump.
UK long-term borrowing costs soar
The yield on long-term UK government bonds or gilts surged to its highest level since the late 1990s Tepid debt auctions stoked concerns about demand. Susannah Streeter, head of currencies and markets at Hargreaves Lansdown, said there were growing concerns that the UK might experience stagflation, a situation in which inflation remains high or rising and economic growth slows.
Anthropic has a potential valuation of $60 billion
Anthropic is an artificial intelligence startup founded by a former senior research executive at OpenAI. Negotiations are ongoing CNBC confirmed that it will raise up to $2 billion at a valuation of $60 billion. According to people familiar with the matter, this round of financing was led by Lightspeed Venture Partners. Anthropic gets a lot of support Amazonthe creator of the artificial intelligence chatbot Claude.
(PRO) Stock market warnings
Howard Marks, co-founder and co-chairman of Oaktree Capital Management, is famous for foreseeing the dot-com bubble. five warning signs on the stock market. While Marks stopped short of calling it a bubble, he was concerned about signs of one in the stock market. Marks says here’s what investors should be aware of.
bottom line
This shows how concerned investors are now about a return to inflation. Institute for Supply Management Service IndexInflation data, which typically comes second to more important data points such as the consumer price index, is sending shockwaves through the market.
The ISM reported price index jumped to 64.4% in December from 58.2% in November, an increase of more than 10%. Steve Miller, chairman of the ISM Business Survey Committee, pointed out that this is the first time since January 2024 that the reading has exceeded 60%.
This could be just the beginning of an unwelcome upward trend. Miller attributed part of the expansion in services activity to “risk management of the impact of port strikes and potential tariffs” – both of which can generate inflationary pressures.
In response, investors pushed higher 10-Year Treasury Bond Yield U.S. interest rates rose to 4.699% during the trading day, the highest level since April 26. data, the probability is 8.6% CME Group’s Fed Watch tool.
The stock market took a heavy hit. this S&P 500 Index Down 1.11% Dow Jones Industrial Average down 0.42%, Nasdaq Index Dragged down by declines in technology stocks, the stock price fell 1.89%. NVIDIA It fell 6.2%, breaking a three-day winning streak.
“Inflation expectations and Fed rate expectations are being reset,” said Tom Herring, senior investment strategist at U.S. Bancorp Asset Management Group. “That triggered a slight sell-off in stocks after earlier enthusiasm.”
But Hainlin said the strong ISM report also showed that the U.S. economy was still performing well, which provided fertile ground for profit growth. As David Lefkowitz, chief information officer for U.S. equities at UBS, wrote in a note on Monday, “profit growth is more important than the valuation of returns over the next 12 months.”
One data point on one inflation measure doesn’t paint a picture of inflation or the health of businesses a year ahead. But it pays to err on the side of caution for now.
—CNBC’s Jeff Cox, Sean Conlon, Pia Singh and Lisa Kailai Han contributed to this report.
