Stocks mixed but world index hits record high; Treasury yields fall

NEW YORK – Major stock indexes were mixed on Tuesday, with a world equity index and the Dow hitting record highs, although other key US indexes weakened, while Treasury yields fell after US data suggested the economy may be softening.

The yen was up again in the wake of Japanese Prime Minister Sanae Takaichi’s decisive weekend election victory. Earlier, the Nikkei 225 hit a fresh peak.

The dollar traded mostly lower against major currencies following the US data and after US Commerce Secretary Howard Lutnick said he viewed the weaker dollar to be at a “more natural” level to promote US exports and expand economic growth.

Among the day’s reports, the Commerce Department said retail sales were unchanged in December, falling short of a forecast by economists polled by Reuters for a rise of 0.4% and below the unrevised 0.6% increase in November. Some investors say weaker data could allow the Federal Reserve more leeway to cut interest rates.

As investors digested the economic news, they braced for the nonfarm US payrolls report for January, which is due on Wednesday.

Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said he suspects the jobs report may be weaker than expected.

“If that comes to fruition, that brings us closer maybe to a rate cut in the second half of the year or maybe the latter part of the first,” he said.

The Dow edged up to register its seventh record close so far this year. But a 1.8% drop in shares of Alphabet weighed on the S&P 500 and Nasdaq. The Google parent said it sold bonds worth USD 20 billion in a seven-part offering.

Investors have been concerned recently about the amount of money technology companies say they must spend to support the artificial intelligence boom, and software names have been hit by fears they could be upended by AI tools. The S&P 500 technology index ended down 0.6% on Tuesday.

The Dow Jones Industrial Average rose 52.27 points, or 0.10%, to 50,188.14. The S&P 500 fell 23.01 points, or 0.33%, to 6,941.81, and the Nasdaq Composite fell 136.20 points, or 0.59%, to 23,102.47.

Among the day’s gainers, shares of Marriott International jumped 8.5% after the company released fourth-quarter results.

MSCI’s gauge of stocks across the globe was up 0.75 points, or 0.07%, at 1,054.72, and hit another record high. The pan-European STOXX 600 index ended down 0.07%.

The yen has rallied this week, seemingly on hopes that political stability in Japan and stimulus will boost growth and drive investor optimism.

Against the Japanese yen, the dollar was down 0.94% to 154.4 in late afternoon trading.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.1% to 96.85, with the euro down 0.15% at USD 1.1895.

The yield on benchmark US 10-year notes fell 5.1 basis points to 4.147%, on track for its fourth straight day of declines. The yield has dropped more than 13 basis points over that time frame, its biggest four-day drop since mid-October.

White House economic adviser Kevin Hassett said on Monday that job gains could be lower in the coming months as the Trump administration’s immigration policies slow labour growth and new AI tools boost productivity.

In commodities markets, US crude fell 40 cents to settle at USD 63.96 a barrel, and Brent fell 24 cents to settle at USD 68.80. Investors were watching for any news on diplomatic relations between the US and Iran.

Other areas of recent market stress were calmer on Tuesday. British government bonds slightly outperformed peers, having lost ground on Monday as Prime Minister Keir Starmer came under increasing pressure.

(Reporting by Caroline Valetkevitch in New York, with additional reporting by Alun John and Dhara Ranasignhe in London, and Gregor Stuart Hunter in Singapore; Editing by Sam Holmes, Kevin Liffey, Chizu Nomiyama, and Edmund Klamann)