Stock market today: World stocks follow Wall Street's retreat, oil prices surge

[January 13, 2025]  By ZIMO ZHONG

HONG KONG (AP) — World stocks retreated on Monday after U.S. stocks fell as good news on the job market added to inflation worries.

The future for the S&P 500 dropped 0.9% and that for the Dow Jones Industrial Average lost 0.4%.

Oil prices surged more than $1 a barrel after President Joe Biden’s administration expanded sanctions against Russia’s critically important energy sector over its war in Ukraine. The Biden administration said the sanctions announced Friday were the most significant to date against Moscow’s oil and liquefied natural gas sectors, major drivers of Russia’s economy.

U.S. benchmark crude oil surged $1.48 to $78.06 per barrel, while Brent crude, the international standard, rose $1.38 to $81.14 per barrel.

In early European trading, Germany’s DAX declined 0.7% to 20,074.11 and the CAC 40 in Paris was down 0.7% to 7,379.02. Britain’s FTSE 100 fell 0.4% to 8,217.34.

Markets in Japan were closed for a holiday.

China reported its exports grew at a 10.7% annual pace in December, faster than expected, as factories rushed to fill orders to beat higher tariffs that U.S. President-elect Donald Trump has threatened to impose once he takes office.

Economists had forecast they would grow about 7%. Imports rose 1% year-on-year. Analysts had expected them to shrink about 1.5%.

The upbeat data failed to boost the region's stocks. Hong Kong’s Hang Seng dropped 1% to 18,874.14, while the Shanghai Composite lost 0.3% to 3,160.76.

“Adding to the skittish sentiment is the uncertainty over how Asian economies, especially China, will fare under the shadow of the incoming Trump administration’s ‘America First’ trade policies,” Stephen Innes of SPI Asset Management said in a commentary.

Australia’s S&P/ASX 200 dipped 1.2% to 8,191.90. South Korea’s Kospi shed 1% to 2,489.56.

A person rides a bicycle in front of an electronic stock board showing Japan's Nikkei index at a securities firm Thursday, Jan. 9, 2025, in Tokyo. (AP Photo/Eugene Hoshiko)

On Friday, the S&P 500 tumbled 1.5%, ending its fourth losing week in the last five. The Dow Jones Industrial Average dropped 1.6% and the Nasdaq composite sank 1.6%.

Stocks took their cues from the bond market, where yields leaped to crank up the pressure after a report said U.S. employers added many more jobs to their payrolls last month than economists expected.

Such strength in hiring is of course good news for workers looking for jobs. But it could also keep upward pressure on inflation by keeping the overall economy humming. That in turn could dissuade the Federal Reserve from delivering the cuts to interest rates that Wall Street loves. Lower rates can not only goose the economy but also boost prices for investments.

The Fed has already indicated it’s likely to ease rates fewer times this year than it earlier expected because of worries about higher inflation. That’s in part because some officials are taking seriously the possibility of tariffs and other policies coming from President-elect Donald Trump that could worsen inflation.

Friday’s jobs report might not have been as strong as it appeared, given weakness in manufacturing.

Markets have been deflating after traders sent U.S. stock indexes to dozens of records last year, banking on a stream of rate cuts coming from the Fed. If fewer cuts materialize than expected, stock prices would likely either need to fall, or profits at companies would have to rise more strongly to compensate.

In other dealings Monday, the U.S. dollar fell to 157.41 Japanese yen from 157.82 yen. The euro dropped to $1.0196 from $1.0244.

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