Us stocks have continued to fall since the start of the year, while US bonds began to rally after the release of the minutes of the last Fed meeting. The Nasdaq (14592.2106, -173.73, -1.18%)100 index fell 1.1% on Wednesday (January 3), its longest losing streak in more than two months. Investors are pulling back from last year's stellar tech stocks. The S&P 500 also fell 0.8%, while the Russell 2000 index of small-cap stocks suffered its biggest drop since the banking crisis in March. Tesla (238.45, -9.97, -4.01%) plummeted. Gold prices closed down for four consecutive trading days, short-term bearish signals have significantly increased, and the risk of a sharp fall in the market needs to be guarded against.

The dollar has strengthened against most G10 currencies for four days in a row, its longest winning streak since November. Federal Reserve policymakers indicated that interest rate limits could last longer than expected last month and pointed to the possibility of a rate cut before the end of the year. Swap traders have been reining in their bets on a rate cut.

Treasury yields closed near session lows on Wednesday, with the 10-year Treasury yield reversing after climbing to just over 4% earlier in the day, its highest level since mid-December. Ian Lyngen, an analyst at BMO Capital Markets, said: "Overall, this is the latest hawkish news from the Fed. Although that tone has clearly been snubbed."

Morgan Stanley (91.91, -1.99, -2.12%) economist Ellen Zentner wrote: "The FOMC minutes focused on the risks of better balancing growth and (5.27, 0.08, 1.54%) inflation, but policy will remain restrictive for some time." We don't think the Fed is planning to cut rates anytime soon."

Fed Chairman Jerome Powell sparked a market rally last month when he said policymakers had discussed cutting rates. Other Fed officials then tried to tamp down market enthusiasm for a faster and deeper rate cut in the following days. Richmond Fed President Thomas Barkin did not make a forecast for the timing of the Fed's first rate cut. "Things are changing," he said. Our approach will be the same. So, fasten your seat belt. Even if you expect a soft landing, this is a safer and more applicable approach."

Data released Wednesday showed that the Institute for Supply Management's manufacturing index came in at 47.4 last month, and it has remained below the 50 level, which indicates a contraction, since the end of 2022. Separately, data showed that the number of job openings in the U.S. fell slightly in November from the previous month's revised figure.

Rubeela Farooqi, chief U.S. economist at High Frequency Economics, believes that overall, the labor market remains strong, but that demand is cooling and there is a better balance with supply. The data are good news for policymakers and support the Fed's view that the next move in interest rates is likely to be lower, possibly in the second quarter. James Knightley, an economist at ING, said Friday's jobs report could further cement the cooling trend. He believes the composition of job growth is almost as important in determining the outlook for a rate cut in 2024 as the number of jobs itself.

In corporate news, Walt Disney (91.65, 0.94, 1.04%) Inc. CEO Bob Iger is trying to win over investors to shake off pressure from billionaire activist Nelson Peltz. Barrick Gold is sounding out some of First Quantum Minerals Ltd's major investors to gauge their support for a potential acquisition.

Looking ahead, the focus will be on Friday's jobs report. The report is likely to further cement the current market view of a cooling economy and have implications for future policymaking. In addition, investors will also focus on corporate earnings and macroeconomic data to understand market dynamics and economic trends. In Friday's financial calendar, we'll be keeping an eye on several key economic indicators. First, the December ADP payroll change in the United States will tell us about private sector employment. Following this, we will be watching last week's seasonally adjusted US jobless claims for insight into the health of the Labour market. In addition, EIA crude oil inventory changes will also provide an update on energy market developments.

In the currency markets, the performance of the euro, pound and yen is worth watching. Eur/USD fell on Wednesday to close at 1.0921, down 0.16%; Technical analysis shows that the initial resistance on the upside is at 1.0959, while the initial support below is at 1.0886. On the other hand, the pound/dollar rose on Wednesday, closing at 1.2664, up 0.41%; On the upside, initial resistance stands at 1.2691, with initial support below at 1.2620. Finally, USD/JPY rose 0.92% to close at 143.28 on Wednesday, with initial resistance above at 144.083 and initial support below at 142.124.