Published : 5 days ago, on 04/12/2024

By Stephen Culp

NEW YORK (Reuters) -A surprise declaration of martial law in Korea that had sent the won plummeting and gave U.S. Treasuries a brief safe-haven boost was lifted on Tuesday, removing one source of geopolitical jitters for world markets to contend with.

The move gave a modest boost to U.S. stocks, which were otherwise muted and range-bound for much of the session.

The S&P 500 and the Nasdaq managed to reach new record closing highs.

“These developments, combined with those in France and the outcome of the U.S. presidential election, all are creating uncertainty as investors think about how to position themselves moving into 2025,” said Greg Bassuk, CEO at AXS Investments in New York.

South Korea’s won had tumbled to a two-year low against the dollar after South Korean President Yoon Suk Yeol declared martial law in what he said was an effort to block efforts by opposition parties to hijack the parliamentary process. He later reversed the decision, honoring a parliamentary vote against the measure.

Crude prices gained amid supply concerns related to OPEC+ output cuts and simmering tensions in the Middle East.

The Labor Department released its closely monitored Job Openings and Labor Turnover Survey (JOLTS), which showed job openings on the rise and layoffs on the wane, supporting the notion that the labor market continues its gradual cooldown.

On Friday, the Labor Department is due to unveil its much-anticipated November employment report, which will be parsed for clues regarding the U.S. Federal Reserve’s policy decisions in December and beyond.

“There’s a host of economic data on this week’s calendar, so investors are taking a wait-and-see as this week’s data will likely impact the Fed’s December rate decision,” Bassuk added.

The Dow Jones Industrial Average fell 76.59 points, or 0.17%, to 44,705.41; the S&P 500 rose 2.73 points, or 0.05%, to 6,049.88; and the Nasdaq Composite rose 76.96 points, or 0.40%, to 19,480.91.

European shares nabbed a one-month high even as political turmoil in France, which has pushed the French government to the verge of collapsing, kept investors on edge.

MSCI’s gauge of stocks across the globe rose 3.16 points, or 0.37%, to 867.80.

The STOXX 600 index rose 0.37%, while Europe’s broad FTSEurofirst 300 index rose 8.89 points, or 0.44%

Emerging market stocks rose 9.83 points, or 0.90%, to 1,096.22.

The dollar closed nominally lower against a basket of world currencies as financial markets cemented expectations that the Fed will make another interest rate cut at this month’s policy meeting.

But its losses were held in check by France’s unfolding political crisis, and lingering tariff threats from President-elect Donald Trump.

China’s onshore yuan touched its weakest level since the 2008 financial crisis in the face of tariff worries.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.03% to 106.34, with the euro up 0.1% at $1.0508.

The Korean won weakened 0.97% against the dollar to 1,418.35 per dollar.

Against the Japanese yen, the dollar weakened 0.08% to 149.47.

Bitcoin was uncharacteristically subdued, prolonging its flirtation with the elusive and closely watched $100,000 mark.

In cryptocurrencies, bitcoin gained 0.29% to $95,686.00. Ethereum declined 0.17% to $3,608.46.

Yields on 10-year Treasuries edged higher in the wake of the JOLTS report as investors cement their expectations for a 25 basis point rate cut at the conclusion of the Fed’s Dec. 17-18 policy meeting.

The yield on benchmark U.S. 10-year notes rose 4 basis points to 4.234%, from 4.194% late on Monday.

The 30-year bond yield rose 5.5 basis points to 4.4129% from 4.358% late on Monday.

The 2-year note yield, which typically moves in step with rate expectations for the Fed, fell 2.3 basis points to 4.175%, from 4.198% late on Monday.

Crude oil prices gained ground ahead of an expected decision by OPEC+ to approve continued output cuts.

Oil’s advance was also supported by a fragile ceasefire between Israel and Lebanon.

U.S. crude rose 2.70% to $69.94 per barrel, while Brent rose to $73.62 per barrel, up 2.49% on the day.

Gold held firm amid firming expectations for a December rate cut from the Federal Reserve.

Spot gold rose 0.13% to $2,642.25 an ounce. U.S. gold futures rose 0.26% to $2,641.70 an ounce.

(Reporting by Stephen Culp; additional reporting by Harry Robertson in London and Kevin Buckland in Tokyo; Editing by Nick Zieminski and Jonathan Oatis)