US durable goods orders fell 1.4% in December to $319.6 billion, according to the US Census Bureau. This followed a 5.4% rise in the previous month and was smaller than the expected 2.0% fall.<\/p>\n
Excluding transportation, new orders rose 0.9%. Excluding defence, new orders fell 2.5%.<\/p>\n
Transportation equipment fell by $6.4 billion, or 5.3%, to $113.5 billion, after declining in two of the last three months. This drop in transportation equipment led the overall decrease in durable goods orders.<\/p>\n
After the data release, the US Dollar Index (DXY) stayed positive and traded around 97.30.<\/p>\n
Looking back at the end of 2025, the 1.4% contraction in December’s durable goods orders was an important signal of industrial slowing. However, the key was the underlying strength, as new orders excluding the volatile transportation sector actually rose 0.9%. This detail suggested that core business investment was not collapsing, despite the negative headline number.<\/p>\n
This pattern of uncertainty has continued into the new year, with the most recent data for January 2026 showing a fragile rebound. While overall orders ticked up a slight 0.5%, the ex-transportation figure was flat, indicating that business caution persists. This manufacturing weakness is happening even as the January jobs report showed a robust addition of 215,000 jobs, creating a very mixed economic picture for us to navigate.<\/p>\n
The main issue complicating matters is inflation, which remains stubbornly above the Federal Reserve’s target, with the latest CPI reading for January coming in at 3.1%. This combination of a cooling industrial sector and persistent inflation puts the Fed in a difficult position, likely delaying any anticipated rate cuts. We saw a similar dynamic in mid-2023, where expectations for rate cuts were repeatedly pushed back, leading to choppy market conditions.<\/p>\n
For derivative traders, this environment suggests focusing on volatility rather than clear directional bets. With conflicting data points, options strategies that profit from price swings, such as long straddles on the SPX, could be beneficial. The CBOE Volatility Index (VIX) has been climbing, recently touching 17.5 from a low of 14 just three weeks ago, reflecting this growing market uncertainty.<\/p>\n
Sector-specific plays are also becoming more relevant, given the divergence in the durable goods report. One could consider bearish positions on transportation ETFs, which are directly impacted by the slowdown in orders, while remaining neutral or cautiously bullish on broader industrial sector funds. This allows us to trade the specific trends we see in the data without making a large bet on the entire economy.<\/p>\n
Given that persistent inflation is likely to keep interest rates elevated, we should also watch derivatives tied to Fed policy. The market has now fully priced out a rate cut in March, with fed funds futures contracts showing less than a 15% chance, down from over 60% a month ago. This shift suggests opportunities in trading options on interest rate futures to hedge against or speculate on rates remaining higher for longer.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US durable goods orders dropped 1.4% in December; transportation led declines, while core orders showed resilience.<\/p>\n","protected":false},"author":62,"featured_media":16962,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42194","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42194","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=42194"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42194\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16962"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42194"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42194"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42194"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}