CNBC Business News Update - Market Midday: Stocks Plunge, Bond Yields Spike, Post-Electon Market Gains Wiped Out 1/10/25

Episode Date: January 10, 2025

From Wall Street to Main Street, the latest on the markets and what it means for your money. Updated regularly on weekdays, featuring CNBC expert analysis and sound from top business newsmakers. Anchored by CNBC's Jessica Ettinger.

I'm Jessica Ettinger. CNBC Wall Street is ugly this afternoon as Treasury yields spike higher. The 10-year Treasury at its highest since the fall of 2023. The jobs report came in hotter than expected as the U.S. labor market is strong. Investors are thinking interest rates aren't going to be coming down anytime soon and that has stocks in the tank. The Dow down 750 points. That's one and three quarters percent. It's being led lower by an insurance company. Shares of travelers down four and a half percent. The S&P 500 index down 110 points. That's almost two percent. And the Nasdaq is now down 420 points, more than 2%. With the Fed, we are already down from hoping for four rate cuts this year to two.

And I think today's number is going to take us well below two to one zero, or maybe even talking about rate hikes. These higher yields are a headwind for the markets, also stronger dollars. So that's also kind of a negative here, which is why the markets are down. Nuveen's Sarah Malik on CNBC. With five trading days left before the inauguration, all the Trump election win gains on Wall Street have been wiped out, according to Bespoke. The U.S. added more than a quarter million new jobs in December, and the unemployment rate

fell to 4.1 percent. That's very near 50-year lows. A strong job market means inflation could stay high. This is because people are working. And when they work, they tend to spend, killing investors' hope for interest rate cuts by the Fed, summed up by the CNBC Squawk Box anchor, Joe Kernan. You know, there are tailwinds and headwinds to everything we talk about. Any hopes for, what were we supposed to, we were going to get four or five rate cuts at one point, right? Then we were down to two. Now we're down to one, and we actually just talked about the possibility that there could be zero. And by the end of the year, who knows?

With, you know, with tariffs and immigration, you could actually be seeing interest rate hikes if inflation stays hot. Wildfires in the Los Angeles area continue to burn out of control on pace to become the costliest fire disaster in U.S. history. J.P. Morgan estimating that insured losses may exceed $20 billion, with more uninsured. The Palisades fire alone causing catastrophic damage in the affluent Pacific Palisades neighborhood. That has a median home price of more than $3 million. State Farm has the most market share with 8 million policies in California. Farmers a close second, travelers, Allstate, Chubb, and USAA in the top 10. Now,

years ago, Chubb began managing down its exposure in the regulated market. That's where the rates have to be approved. Instead, it writes property insurance for high net worth individuals, which are not subject to that regulatory rate approval. AIG and pure insurance also target those high end policies that we could see getting hit from the fires. Most importantly about all of this is will the California insurance market hold? That is the primary question when it comes to where do we go from here? CNBC's Contessa Brewer, Jessica Ettinger, CNBC. Essential investing tools for wealth management, plus CNBC global market news and analysis tailored to your holdings. Become a smarter investor with the power of CNBC Pro.

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