Market Performance - Benchmark indices Sensex and Nifty experienced selling pressure for the fifth consecutive session, declining nearly 1 percent due to investor caution over potential US tariff hikes and ongoing geopolitical concerns [1][7] - The BSE Sensex fell by 604.72 points, or 0.72 percent, settling at 83,576.24, while the NSE Nifty dropped 193.55 points, or 0.75 percent, to 25,683.30 [3][4] Foreign and Domestic Investment - Foreign institutional investors sold equities worth Rs 3,367.12 crore, while domestic institutional investors purchased stocks worth Rs 3,701.17 crore on Thursday [6] - The continuous outflow of foreign capital has negatively impacted market sentiment [3] Sector Performance - Among the 30 Sensex firms, NTPC, ICICI Bank, Adani Ports, Bharti Airtel, Sun Pharma, and Bajaj Finance were the biggest laggards, while Asian Paints, HCL Tech, Bharat Electronics, and Reliance Industries showed gains [4] Global Market Context - Asian markets, including South Korea's Kospi, Japan's Nikkei 225, Shanghai's SSE Composite, and Hong Kong's Hang Seng, ended higher, contrasting with the Indian market's performance [7] - European markets were trading positively, while US markets closed mixed [8]

Market Overview - Stocks are expected to decline on Thursday, following a selloff in the previous session where two of the three major indexes recorded their first losses of 2026 [1] - Futures for the Dow Jones Industrial Average fell by 142 points, or 0.3%, while S&P 500 contracts decreased by 0.2% and Nasdaq 100 futures also dropped by 0.3% [1] Economic Indicators - Investors are increasingly focused on economic data, with Thursday's initial jobless claims data anticipated to influence market movements [2]

Core Viewpoint - The stock market is experiencing an upward trend despite increasing geopolitical tensions following the U.S. capture of Venezuelan leader Nicolás Maduro [1] Group 1 - The stock market has been climbing, indicating investor confidence [1] - Rising geopolitical tensions are present, particularly related to the situation in Venezuela [1] - The capture of Nicolás Maduro by the U.S. is a significant event influencing market dynamics [1]

Financial Institutions - Goldman Sachs Group Inc. (GS) received a significant price target increase from BMO, which raised its target to $980 from $785 [2][9] - Truist Securities also lifted its target for JPMorgan Chase & Co. (JPM) to $331 from $330 [2][9] - Wells Fargo downgraded D.R. Horton, Inc. (DHI) to Equal Weight from Overweight, cutting its price target to $155 from $180, indicating a more cautious outlook on the homebuilder [3][9] Geopolitical Developments - Ukrainian drones reportedly struck Russian missile, ammunition, and oil depots in the Kostroma and Lipetsk regions, intensifying ongoing hostilities as President Zelenskiy arrived in Paris for talks [4][9] International Trade - China's Commerce Ministry imposed export controls on dual-use items to Japan, signaling potential shifts in international trade relations [6][9]

Market Overview - Asian stocks continued a global record run, with investors focusing on upcoming U.S. economic data despite geopolitical tensions [1] - U.S. manufacturing activity contracted in December, the most significant decline since 2024, increasing expectations for Federal Reserve policy easing [1] Commodity Prices - Gold prices rose to over $4,460 an ounce, while oil prices eased after a previous increase of $1 per barrel due to concerns about crude flows from Venezuela [2] - The U.S. military operation in Venezuela has sparked optimism for future investments in the U.S. oil industry [5] Regional Stock Performance - China's Shanghai Composite index increased by 1.50% to 4,083.67, marking its highest level in over a decade [2] - Hong Kong's Hang Seng index surged by 1.38% to 26,710.45, driven by gains in the financial sector [2] - Japan's Nikkei average rose by 1.32% to 52,518.08, led by oil-related stocks and precision tools maker Disco Corp., which increased by 6.1% [3] - Seoul's Kospi average jumped by 1.52% to 4,525.48, supported by gains in semiconductors, brokerages, and shipbuilders [4] - New Zealand's S&P/NZX-50 index rose by 0.56% to 13,663.58, nearing a six-week high [5] U.S. Stock Market - U.S. stocks experienced gains, with the Dow increasing by 1.2% to a new record closing high, the S&P 500 gaining 0.6%, and the Nasdaq Composite advancing by 0.7% [6]

Geopolitical Developments - President Trump announced a "large scale strike" in Venezuela, resulting in the capture of President Nicolás Maduro and his wife, Cilia Flores, with the U.S. planning to "run" Venezuela [2] - The geopolitical landscape remains volatile, with significant implications for market dynamics and investor sentiment [11] Market Reactions - The DJIA rose by 319.10 points (+0.66%) to close at 48,382.39, breaking a four-day losing streak, while the S&P 500 gained 12.97 points (+0.19%) to reach 6,858.47 [3] - The NASDAQ Composite dipped slightly by 6.36 points (-0.03%) to 23,235.63, reflecting mixed reactions among tech stocks [4] Sector Performance - Industrial companies like Caterpillar (CAT) and Boeing (BA) saw gains of +4.5% and +4.9% respectively, likely due to expectations of increased demand for machinery and aircraft in Venezuela [4] - In contrast, tech stocks faced challenges, with Tesla (TSLA) declining by 2.6% and Microsoft (MSFT) down approximately 0.9% [4] Oil Market Dynamics - Venezuela holds the world's largest proven oil reserves at 300 billion barrels, but initial predictions of a price spike in Brent crude were not realized, with prices easing instead [5] - Brent crude futures settled down 0.16% at $60.75 per barrel, while U.S. West Texas Intermediate crude was at $57.32 per barrel, influenced by global oversupply concerns [5] - Contradictory reports indicated Brent crude spiked 8% to $95 per barrel due to supply disruption fears, benefiting U.S. shale producers [6] Tariff Implications - The Supreme Court is expected to rule on the legality of Trump's tariffs, with a 75-77% probability that they will be struck down or limited, potentially costing the U.S. Treasury over $100 billion in refunds [8] - Tariffs increased from 2.5% to 15% in 2025, projected to add $1,400 per U.S. household in 2026, although some stocks like RH and Wayfair benefited from delayed tariff increases [9] Federal Reserve Transition - The impending transition of the Federal Reserve Chair, with Jerome Powell's term ending in May 2026, introduces potential policy changes and market volatility [10] - Analysts predict two rate cuts in 2026, with a 92% probability that a new chair will be announced before February 1st, likely favoring lower rates [10]

Core Viewpoint - Gold and silver experienced significant volatility at the end of the year, with both metals reaching all-time highs before facing a sharp selloff driven by margin requirements and market speculation [1][3][17]. Price Movements - Gold prices fell over 4% on Monday to approximately $4,355 per ounce after peaking near $4,565 late last week, but rebounded to the $4,385 to $4,400 range on Tuesday [1][7][8]. - Silver saw even more drastic fluctuations, dropping nearly 9% on Monday to just above $73 per ounce after trading above $84 over the weekend, then surging up to 10% intraday on Tuesday [2][10][11]. Market Dynamics - The initial selloff was triggered by CME Group's decision to raise margin requirements on precious metals futures, leading to forced selling during a period of low liquidity [3][4]. - The volatility in the market is exacerbated by the thin trading environment typical of late December, where prices can swing dramatically on minimal conviction [7][16]. Speculative Behavior - The rapid price movements indicate a speculative environment, particularly for silver, which has outpaced gold significantly this year, with gains more than double those of gold at one point [11][16]. - Market participants noted that the rebound in prices suggests underlying demand remains strong, particularly from investors looking for entry points after the selloff [18]. Annual Performance - Despite recent volatility, both gold and silver are on track for their best annual gains since 1979, with silver up approximately 150% to 160% and gold up about 65% to 70% for the year [17].

Core Viewpoint - Oil prices are experiencing their steepest annual decline since the Covid-era crash in 2020, primarily due to fears of a supply glut and economic pressures on Russia from sanctions and discounts [1][7] Supply and Demand Dynamics - The supply-demand imbalance has significantly impacted oil prices, overshadowing geopolitical tensions that could have otherwise supported crude prices, such as US strikes on Iran and blockades on Venezuelan oil tankers [2] - The lack of volatility in oil markets this year is attributed to fatigue over geopolitical events and rising expectations of a supply surplus later in the year [3][2] Impact on Russia's Economy - Persistently low oil prices have intensified the effects of Western sanctions on Russia following its invasion of Ukraine, with discounts on Russian oil reaching historic highs [4] - Russian crude is being sold at discounts of $20 to $30 per barrel below Brent prices, marking the widest gap since early 2022, leading to a 50% drop in oil export revenues measured in rubles [5] - Russia's GDP growth has slowed to 0.6% in Q3, down from 1.1% in Q2 and 1.4% in Q1, with forecasts for future growth being revised downward [6]

Core Viewpoint - Oil prices are experiencing a decline as traders conclude a year marked by oversupply concerns, despite ongoing geopolitical tensions affecting the market [1][2] Group 1: Price Movements - Brent crude is currently priced at $61.12 per barrel, reflecting a decrease of 0.35% [1] - WTI crude is trading at $57.74 per barrel, down 0.4% [1] - For the year, Brent crude has fallen over 18%, while WTI has decreased nearly 20% [2] Group 2: Geopolitical Factors - Recent advancements in Russia-Ukraine peace talks have reduced the geopolitical premium on oil prices [2] - The U.S. blockade on Venezuelan oil exports had previously contributed to a temporary rally in oil prices [1]

Group 1 - Jim Wyckoff has over 25 years of experience in stock, financial, and commodity markets, including roles as a financial journalist and reporter on commodity futures trading floors in Chicago and New York [1] - He has covered every futures market traded in the U.S. at various times throughout his career [1] - Jim is the owner of "Jim Wyckoff on the Markets," which provides analytical, educational, and trading advisory services [2] Group 2 - He has worked as a technical analyst for Dow Jones Newswires and as a senior market analyst with TraderPlanet.com [2] - Jim is also a consultant for the "Pro Farmer" agricultural advisory service and was the head equities analyst at CapitalistEdge.com [2] - He holds a degree in journalism and economics from Iowa State University [2]