NEW YORK/LONDON, Dec 23 (Reuters) - A global equity index was rising on Monday with help from Wall Street heavyweights and U.S. Treasury yields climbed as data showed a deterioration in U.S. consumer confidence and investors prepared themselves for fewer rate cuts in 2025.
In U.S. equities, Nasdaq (.IXIC), opens new tab and the S&P 500 (.SPX), opens new tab were boosted mostly by rallies in megacap stocks such as Nvidia Corp (NVDA.O), opens new tab and Broadcom Inc (AVGO.O), opens new tab.
Earlier, the Conference Board said its U.S. consumer confidence index weakened in December to 104.7 versus economist expectations for an increase to 113.3 and November's upwardly revised 112.8 on concerns about future business conditions.
While new orders for key U.S.-manufactured capital goods rose in November amid strong demand for machinery, orders of durable goods - ranging from toasters to aircraft - dropped 1.1% after increasing 0.8% in October, with declines mostly reflecting weakness in commercial aircraft orders.
Citing weak consumer confidence as a key negative for equities on Monday, Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas, highlighted the 10-year Treasury yield's jump to its highest level since late May.
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"It's important for equity investors that the 4.6% level holds for 10-year Treasury yields and if we break above it there's a risk the market will go ahead and test 5%," he said, pointing to slowing Federal Reserve rate cuts as the reason.
"The market is adjusting to a less dovish Fed policy," said Phipps, noting that U.S. indexes looked weaker under the hood on Monday. "It is a deceptively strong market because if you took out about 10 megacap stocks that are gaining, the market would be sharply lower."
At 02:52 p.m. the Dow Jones Industrial Average (.DJI), opens new tab fell 46.08 points, or 0.11%, to 42,794.18, the S&P 500 (.SPX), opens new tab rose 25.44 points, or 0.43%, to 5,956.29 and the Nasdaq Composite (.IXIC), opens new tab rose 147.08 points, or 0.75%, to 19,719.67
MSCI's gauge of stocks across the globe (.MIWD00000PUS), opens new tab rose 3.87 points, or 0.46%, to 848.10 while earlier, Europe's STOXX 600 (.STOXX), opens new tab index closed up 0.14%.
Ahead of Tuesday's shorter trading day and Wednesday's market close for Christmas, Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder said investors still had last Wednesday's steep sell-off on their minds after the Fed clearly signalled for fewer rate cuts next year.
"There's concern about the economy. There's concern about the Fed making a wrong move and there's the great unknown of what Trump is actually going to do," said Ghriskey, referring to U.S. President-elect Donald Trump's Jan. 20 inauguration.
In U.S. Treasuries, yields rose before Monday's sale of two-year Treasury notes but changed little right after the auction.
The yield on benchmark U.S. 10-year notes rose 7.3 basis points to 4.597%, from 4.524% late on Friday while the 30-year bond yield rose 6.7 basis points to 4.7832%.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 3.5 basis points to 4.347%, from 4.312% late on Friday.
In currencies, the dollar advanced after a drop in the prior session while the euro fell as recent global central bank meetings set expectations for diverging rate cut paths in 2025.
The dollar index , measuring the U.S. currency against a basket of major currencies, rose 0.25% to 108.06.
The euro was down 0.2% at $1.0408 while against the Japanese yen , the dollar strengthened 0.44% to 157.1.
Sterling weakened 0.31% to $1.253 and the Mexican peso < MXN=> weakened 0.66% versus the dollar at 20.221.
Oil prices edged down in thin trade ahead of the Christmas holiday on concerns about a supply surplus next year and a strengthened dollar.
U.S. crude settled down 0.32%, or 22 cents at $69.24 a barrel and Brent fell to $72.63 per barrel, down 0.43%, or 31 cents on the day.
Gold prices edged lower in subdued holiday-season trading, weighed down by a robust dollar and high U.S. Treasury yields.
Spot gold fell 0.42% to $2,609.73 an ounce. U.S. gold futures fell 0.67% to $2,611.10 an ounce.
Reporting by Sinéad Carew in New York, Amanda Cooper in London, Wayne Cole in Sydney; Editing by Alistair Bell and Howard Goller
