In recent financial news, both the US and Asian markets experienced significant fluctuations, reflecting a broader atmosphere of uncertainty and volatility. This turbulence was propelled by a variety of factors, including concerns over rising Treasury yields, apprehensions about potential interest rate hikes by the US Federal Reserve, and mixed corporate earnings reports.
In the US, major stock indices such as the S&P 500 and Nasdaq Composite recorded notable declines, with losses of 0.74% and 0.58% respectively. The Dow Jones Industrial Average also saw a substantial downturn, dropping by 1.06%. These declines came on the heels of the Nasdaq briefly surpassing the 17,000 mark before retracing its gains, while the Russell 2000 index experienced a significant drop of 1.5%. Looking ahead, investors are preparing for another challenging session, as indicated by FTSE 100 futures signaling a 9-point decline following a 1.29% decrease in the previous trading session.
The negative sentiment spilled over into Asian markets, where indices mirrored the US downturn. Japan’s Topix index fell by 0.8%, and the Nikkei 225 dropped by 1.7%, primarily due to concerns surrounding exporters. Similar downward movements were observed in Australia and South Korea, while China’s CSI300 index experienced a slight easing of 0.25%. However, Hong Kong’s Hang Seng Index managed to edge up marginally by 0.17%.
Currency markets also felt the impact, with the US dollar index gaining 0.5% against major currencies. This uptick was fueled by speculation regarding prolonged high interest rates by the Federal Reserve. Consequently, most Asian currencies weakened against the dollar, with the Indonesian rupiah and South Korean won leading the declines. However, the Japanese yen remained relatively stable at around ¥157.40 in early trading.
In the realm of commodities, there were mixed movements. Oil prices rebounded slightly after a previous dip, with Brent crude holding steady at $83.60 per barrel and US crude edging up to $79.25. However, spot gold experienced a decline, falling to $2,334.15 per ounce.
Post-market trading saw Salesforce shares plummet by over 15% following weak results and a below-expectation second-quarter revenue forecast. Conversely, Marathon Oil shares surged by 8.4% after ConocoPhillips announced an all-stock acquisition deal valued at over $15 billion. However, ConocoPhillips shares dropped by 3.1%, contributing to a 1.8% decline in the energy sector. Additionally, airline stocks, led by American Airlines, experienced significant losses after revising down second-quarter profit forecasts.
Amidst this volatility, there were some positive developments. Dick’s Sporting Goods saw a rise of 15.9% after raising its annual sales and profit forecasts, while Abercrombie & Fitch surged by 24.3% due to an improved annual sales growth outlook.
In the UK, attention shifted to the automotive sector, where car production declined by 7% in April, marking the second consecutive monthly decrease. Electrified vehicles accounted for 40.5% of total production, with electric vehicles showing a slight increase.
Looking ahead, Thursday’s focus will be on the US, with key economic reports and speeches scheduled. These include the second estimate of first-quarter GDP growth, weekly jobless claims, and April’s pending home sales. In the eurozone, the European Commission will release the May economic sentiment index. Meanwhile, in the UK, investors await earnings reports from companies such as Auto Trader and British American Tobacco.