Crude oil is headed for its most significant weekly decline since November, creating ripples across the global markets. The Dow Jones Industrial Average (Dow) has surged 2.5% week to date, leading a strong market performance. The S&P 500 opened Friday's session nearly flat, yet it hit a record closing high following President Donald Trump's remarks at the World Economic Forum in Davos, Switzerland. Trump advocated for an immediate reduction in interest rates and urged OPEC nations to lower oil prices. Meanwhile, the Nasdaq Composite has mirrored the positive momentum, climbing approximately 2.2% this week.
In after-hours trading, CSX shares dropped 2% following a revenue miss, and Boeing saw its shares fall nearly 2% after releasing preliminary fourth-quarter financial results. Conversely, Novo Nordisk's stock soared by 9% due to promising early-stage results for its weight-loss drug. The positive performance of major indices comes despite March Brent futures declining 3.1%, potentially marking the largest weekly loss since November 15.
President Trump's demand for lower interest rates contributed to the market's uplift, with the S&P 500 closing at a record high. The President also announced plans to ask Saudi Arabia and other OPEC nations to reduce crude oil prices, in response to the significant drop seen this week.
In corporate earnings news, Travelers surpassed Wall Street expectations by reporting core income of $9.15 per share, exceeding the anticipated $6.64. The company credited its performance to improving profitability in both its commercial and personal lines of business.
"Both the commercial lines unit is holding its profitability better than we expected and the personal lines underwriting is improving faster than we expected," said Newsome.
"The company has reduced its combined ratio in Business Insurance to 94.2% in FY24 from highs of around 101% over the last few years. Improvement on an underwriting basis in personal lines was particularly strong this quarter at an 80.7% combined versus 86.8% in the prior year period," added Newsome.
Meanwhile, the Bank of Japan raised its policy rate by 25 basis points to 0.5%, reaching its highest level since 2008. This move reflects global central banks' efforts to address inflationary pressures amid volatile economic conditions.
On the agricultural front, March corn futures reached $4.945 a bushel on Thursday, the highest since October 2023. This surge in corn prices highlights the ongoing complexities in global commodity markets.
Novo Nordisk's recent rally was bolstered by successful trials of its weight-loss drug, amycretin. The results suggest potent weight-lowering potential, boosting investor confidence and driving the company's stock gains.
"We are very encouraged by the subcutaneous phase 1b/2a results for amycretin in people living with overweight or obesity," noted Martin Lange, executive vice president for development at Novo Nordisk.
"The results seen in the trial support the weight lowering potential of this novel unimolecular GLP-1 and amylin receptor agonist, amycretin, that we have previously seen with the oral formulation," Lange continued.