“Investors are in wait-and-see mode,” Noel Dixon, senior macro strategist at State Street Corporation, told Bloomberg TV. “We don’t know what the retaliation effect will be or how the Fed will ultimately respond to these tariffs.”
Investors will be watching for key official indicators on Chinese factory activity to be released on Tuesday. The official Manufacturing Purchasing Managers Index is likely to show that despite increased stimulus and a boost to exports, little domestic economic recovery has materialized, according to Bloomberg Economics.
In the latest sign that tensions between China and Washington are not abating, the US Treasury announced that it was hacked by Chinese state-sponsored attackers through a third-party software service provider.
Back in the US, US Treasuries rebounded on Monday after data from the Chicago Purchasing Managers Index showed an unexpected decline. Monday’s data also showed that pending U.S. home sales increased for the fourth straight month in November, reaching their highest level since early 2023.
When it comes to commodities, markets face a tumultuous outlook for the year ahead, with oil headed for modest losses for the year after months of being trapped in a narrow trading range.
