Weak economic data from the United States and geopolitical tensions are impacting risk sentiment, putting pressure on the stock market, while bond prices rise and precious metals continue their downward trend.
On January 8, U.S. stock index futures fell collectively, most Asian stock indices declined, while South Korean stocks rose against the trend to reach a new high. U.S. Treasury and global bond prices rose together, and the U.S. dollar remained largely flat. Gold and silver led the decline in precious metals, crude oil rebounded due to geopolitical supply concerns, and cryptocurrencies faced pressure.
The optimistic sentiment supporting risk assets since the beginning of the year is showing signs of fading due to increased geopolitical uncertainty. Meanwhile, traders are closely watching the U.S. Supreme Court's upcoming key ruling on Trump's global tariff policy, which is expected on Friday.
Charu Chanana, Chief Investment Strategist at Saxo Bank, stated:
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&#34;The market is taking a breather after a strong start in 2026, and no one is willing to increase new risk exposure before the U.S. employment report is released on Friday. The debate over the Federal Reserve's policy is not yet over, and the regional security situation is keeping investors cautious.&#34;
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Core market trends are as follows:
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Dow futures fell nearly 0.3%, S&amp;P 500 futures dropped over 0.3%, and Nasdaq 100 futures fell over 0.5%.
The Nikkei 225 index closed down 1.6% at 51,117.26 points, while the Tokyo Stock Exchange index fell 0.8% to 3,484.34 points.
The yield on the 10-year U.S. Treasury bond decreased by 1 basis point to 4.13%, the yield on Japan's 10-year government bond fell by 4.5 basis points to 2.075%, and Australia's 10-year government bond yield dropped by 9 basis points to 4.67%.
The U.S. dollar index remained largely flat, the yen rose 0.1% against the dollar to 156.56.
Spot silver fell 2.23% to $76.45 per ounce. Spot gold dropped 0.43% to $4,437 per ounce.
Bitcoin fell 1.1% to $90,034.81, while Ethereum dropped 1% to $3,114.62.
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The strong start of the U.S. stock market at the beginning of the year is showing signs of cooling, with U.S. stock index futures collectively declining. Mixed economic data from the U.S. combined with Trump's intensive geopolitical policy statements prompted traders to take some profits ahead of the non-farm payroll report.
According to Wall Street News, the overnight ADP report showed that private sector hiring in December was moderate, indicating that momentum in the labor market is slowing. However, the subsequently released ISM Services Index expanded at the fastest pace in over a year, painting a picture of still strong economic demand, creating conflicting signals that left the market in a wait-and-see mode.
The market is closely watching the U.S. December non-farm payroll report, which will be released on Friday local time. This will be the first release since the U.S. government shutdown for six weeks last October, which disrupted the collection of key economic data for several months.
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Despite most Asian stock indices following the decline of U.S. stocks overnight, the South Korean stock market reached a historic high for the KOSPI index after strong earnings expectations from Samsung Electronics boosted market sentiment. Samsung Electronics' stock price fell 1.6% as investors took profits after a recent rise, despite an early morning increase of 3%.
According to Wallstreetcn, Samsung released its Q4 earnings guidance today: operating profit is expected to reach 20 trillion won, tripling year-on-year and surging 64% quarter-on-quarter, setting a historical record, with sales also soaring to a historic high of 93 trillion won.
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In the context of pressure on risk assets, the global bond market has become a &#34;safe haven&#34; for capital flows. The yield on the U.S. 10-year Treasury bond fell to 4.14%. Government bond prices in major European countries generally rose, while Australia's bond prices were significantly boosted due to weaker-than-expected inflation data and clear cautious policy signals from the central bank.
The global bond market is experiencing the busiest start ever. According to Wallstreetcn, data compiled by Bloomberg shows that as of January 7, the total borrowing by corporations and governments in the U.S., Europe, and Asia across various currency markets has reached approximately $245 billion. This figure sets a historical record for the same period. U.S. investment-grade bonds issued $72 billion over two days, while Europe raised over €57 billion in a single day, both breaking records.
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The precious metals market has once again undergone a collective adjustment. As mentioned in a previous article by Wallstreetcn, the precious metals market faced liquidity shocks due to the annual weight rebalancing of the Bloomberg Commodity Index. This mechanism was initiated after today's market close and will continue until the 14th. This adjustment will reduce the gold weight from 20.4% to 14.9% and the silver weight from 9.6% to 3.94%, forcing passive funds tracking this index to make mechanical position adjustments.
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Crude oil prices fluctuate due to geopolitical news. According to Xinhua News Agency, at 8:43 AM Eastern Time on the 7th, the U.S. European Command announced on social media that a tanker was seized in the North Atlantic, reportedly flying the Russian flag.
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Since the beginning of the year, the optimistic sentiment supporting risk assets has been fading due to increasing geopolitical uncertainties. Most global stock markets have declined, with U.S. stock index futures experiencing a collective sharp drop, while South Korean stocks have risen against the trend, reaching new highs. In the context of pressure on risk assets, the global bond market has become a "safe haven" for capital flows. Precious metals continue to decline under the influence of the annual weight rebalancing of the Bloomberg Commodity Index

Wallstreetcn

As risk aversion rises, the global stock market's upward momentum pauses, with Nasdaq futures down 0.5%. The bond market is favored, while gold and silver decline