- US equities stay pressured amid downbeat data, fears of reflation and chip shortage.
- Technology shares couldn’t keep early-day bounce.
- US housing data dimmed upbeat earnings of Home Depot, Walmart.
- White House conveys good news for EVs, Japan joins US, China to push chipmaking.
Wall Street benchmarks dropped for the second consecutive day amid mixed signals and extended uncertainty over Fed’s next move. Technology shares remain as the bear’s favorites while retails also couldn’t cheer upbeat results from giants. US housing data came in a weaker-than-expected and dimmed global policymakers’ battle to renew market sentiment towards risk-on.
Amid these plays, Dow Jones Industrial Average (DJIA) dropped 0.78% or 267.13 points to mark its second consecutive daily loss by closing around 34,060.66. Further, the S&P 500 drops the most among the key benchmarks, down 35.45 points or 0.85% to end the day near 4,127.84. Additionally, the Nasdaq slipped 0.56% or 75.41 points of loss, while finishing the day’s trading at 13,303.64.
Although downbeat US Housing Starts and Building Permits joined the global movement to ease out vaccine shortage initially favored the risk sentiment, cautious mood ahead of Wednesday’s US Federal Open Market Committee (FOMC) meeting minutes weighed on the mood afterward. Growing fears of the coronavirus (COVID-19) in Asia and the Indian strain on the covid in the West exert additional downside pressure on the market’s mood.
It should, however, be noted that the governments in Japan, US and China rolled up their sleeves to pump chipmaking activities and the White House favor for Electric Vehicles (EV) couldn’t please the bulls, not to forget better than forecast results from Home Depot and Walmart.
A Bank of America (BofA) survey suggesting Fund managers turned overweight on UK stocks for the first time in seven years and cut exposure to tech stocks as rising inflation leaves growth stocks vulnerable to pullbacks weighed on market sentiment.
Moving on, FOMC minutes remain as the key event for Wednesday where markets will parse the central bank’s economic view and future guide considering the latest jump in inflation. Given the policymakers’ rejection of adjustments, coupled with the latest favor for technology and EV companies, US equities may snap a two-day downtrend. Though, inflation woes can keep traders cautious.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops to near 1.0850, further support at nine-day EMA
EUR/USD continues to lose ground, trading around 1.0860 during the Asian hours on Friday. From a technical perspective on a daily chart analysis indicates a sideways trend for the pair as it continues to lie within the symmetrical triangle.
GBP/USD posts modest gains above 1.2650, focus on the Fedspeak
The GBP/USD pair posts modest gains near 1.2670 during the Asian session on Friday. Meanwhile, the USD Index recovers some lost ground after retracing to multi-week lows near 104.00 in the previous session.
Gold price loses momentum, with Fed speakers in focus
Gold price trades with a bearish bias on Friday after retreating from the nearly $2,400 barrier. The bullish move of precious metals in the previous sessions was bolstered by the softer-than-expected US inflation data in April, which triggered hope for rate cuts from the US Federal Reserve.
LINK price jumps 10% as Chainlink races toward tokenization of funds
Chainlink price has remained range-bound for a while, stuck between the $16.00 roadblock to the upside and $13.08 to the downside. However, in light of recent revelations, the token may have further upside potential.
Fed speak tempers rate cut expectations
The biggest takeaway into Friday is the latest round of Fed speak. These Fed officials reiterated their stance rates should be kept restrictive for a longer period of time until there is more clear evidence inflation is heading back towards the 2% target.