Stock indexes are falling today, with the S&P 500 and Nasdaq 100 hitting 3-week lows. Weakness in AI infrastructure and chip maker stocks is dragging the market down. Energy producers are climbing, with WTI crude oil up over 1% following an oil blockade on Venezuelan tankers. Precious metals are soaring amid escalating tensions in Venezuela.

Dovish comments from Fed Governor Christopher Waller support stocks and bonds. He highlighted soft labor market conditions and anchored inflation around 2%. Mortgage applications fell, with the average 30-year fixed rate rising to 6.38%. This week’s focus is on US economic data, including unemployment claims, CPI, existing home sales, and consumer sentiment.

The FOMC meeting in January may see a 24% chance of a rate cut. Overseas markets are mixed, with the Euro Stoxx 50 down and China’s Shanghai Composite up. Interest rates are slightly higher today, with 10-year T-notes up by +1 tick. The yield curve is steepening due to Fed liquidity injections.

European government bond yields are mixed, with Eurozone CPI revised downward. The German IFO business conditions survey fell to a 7-month low. UK CPI eased to +3.2% y/y. The ECB is not expected to cut rates at the next meeting.

Stock movers include AI infrastructure and chip maker stocks sliding, while energy producers are climbing. Homebuilding stocks are lower, with Lennar down 5%. Oracle is down 5% after a report on a data center deal. Paramount Skydance and Worthington Enterprises are also down.

Gainers include Texas Pacific Land Corp, Albemarle, and Lumentum Holdings. General Mills and Netflix are up, with earnings reports from General Mills, Jabil Inc, Micron Technology Inc, and Toro Co/The expected. The author does not hold positions in mentioned securities. The views expressed are solely for informational purposes.

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