North American trading on 24 February 2025 saw US stocks decline despite discussions of a potential peace deal regarding Ukraine. The Dallas Fed manufacturing index fell to -8.3, its lowest since September 2024, contributing to the downward trend in indices.
The NASDAQ dropped by 248.55 points, while the S&P and Dow also experienced declines. Although a report indicated that a US-Ukraine minerals deal was close, it failed to boost stock performance significantly.
The US Treasury successfully auctioned $69 billion in two-year notes at a yield of 4.169%. In the forex market, the EURUSD fluctuated around 1.0466, and the GBPUSD traded near the 38.2% retracement level of 1.26076.
Bond traders reacted to the Treasury auction without much surprise, as the yield on the two-year note remained within expected ranges. With demand closely resembling recent auctions, broader market sentiment remained cautious. Equity traders paid more attention to the Dallas Fed data, which pointed to slowing economic conditions in Texas. Although this regional index does not always dictate national trends, its decline sparked discussions about manufacturing strength across other states.
Currency markets showed limited reaction to the Treasury auction results. The euro struggled to gain momentum after testing familiar levels against the dollar. Meanwhile, sterling held near its retracement mark, suggesting traders were hesitant to commit to a clear direction. The lack of a breakout reflected uncertainty in broader financial markets rather than any sudden shift in fundamentals.
Looking ahead, short-term interest rate expectations remain a primary focus. Federal Reserve officials have expressed mixed views on the timing of adjustments, keeping markets uncertain. Some anticipate slight policy shifts in response to economic data, while others argue for patience. Any fresh comments from policymakers this week could cause short-term volatility.
Commodity markets saw minor moves, with oil prices trading in a narrow range. Speculation around supply adjustments remains a factor, but no immediate shifts were evident. While some traders positioned for potential changes following developments in Ukraine, market participants largely waited for clearer signals.
With indices under pressure and economic signals mixed, short-term traders need to stay aware of potential catalysts. Inflation readings, central bank speeches, and geopolitical headlines continue to shape expectations. Those monitoring price movements should be prepared for shifts depending on how the next round of data unfolds.
