The impact of geopolitical events is also highlighted, particularly the deadly blasts in Iran labeled as a “terrorist attack.” This incident intensified existing tensions in the Middle East, contributing to concerns in the oil market. The article notes that oil prices extended their rally following the Iran blasts and mentions that the region’s volatility, including the Israel-Gaza conflict and recent events in Lebanon, adds to supply concerns.
The broader context of the article emphasizes the end of the global rally that characterized the final months of 2023. Traders are portrayed as taking a cautious stance at the beginning of the new year, reflecting concerns that the previous buying surge might have been excessive.
The article touches upon the Federal Reserve’s desire to make sure inflation is under control before considering rate cuts. While officials expressed optimism about progress on inflation, there was no indication of the timing for rate reductions.
Additional insights include the assessment of the labor market, described as remaining strong but with cooling demand aligning with supply. Data on job openings falling in December and the factory sector continuing in contraction are highlighted. The focus is expected to shift to the release of non-farm payrolls data on Friday, with expectations that it will support the Fed’s view of a lower interest rate in the second quarter.
