Inflation data and earnings reports unsettled Wall Street, resulting in its worst week since October
Wall Street experienced a volatile session during the earnings reporting season, with the Dow plummeting nearly -582 points and the S&P 500 sliding as much as -1.75% at one point before closing out its worst week since October.
Geopolitical tensions escalated as Iran threatened retaliation against Israel for the April 1 airstrike on its embassy in Damascus, contributing to the market sell-off.
This week's data, highlighted by market-moving inflation figures, may prompt the U.S. Federal Reserve to reconsider its rate cut expectations.
At the close of the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, a significant indicator of blue-chip stocks, fell -475.84 points, or -1.24%, to 37,983.24.
The Standard & Poor's 500 Index, reflecting a wide array of stocks, lost -75.65 points, or -1.46%, at 5,123.41, while the Nasdaq Composite Index, which is heavily influenced by technology stocks, dropped -267.10 points, or -1.62%, to 16,175.09.
All 11 major sectors in the S&P 500 closed in the red, with materials suffering the steepest percentage loss.
The broad market index dropped -1.56% for the week, while the 30-stock Dow fell -2.37%. The tech-heavy Nasdaq, on the other hand, is -0.45% lower for the week.
Among the "Magnificent Seven," Tesla fell -2%, Microsoft dropped -1.41%, Apple edged higher by +0.86%, Nvidia fell -2.68%, Alphabet erased -1%, Amazon dropped -1.54%, and Meta slid -2.15%.
Advanced Micro Devices and Intel fell by -4.2% and -5.2%, respectively, following a report that Chinese officials instructed the country's largest telecom firm to phase out foreign chips by 2027.
Regarding earnings, JPMorgan Chase shares declined more than -6% after the banking giant posted its first-quarter results.
Meanwhile, Wells Fargo slipped -0.4% after reporting a -7% drop in profits due to weak borrowing demand, and Citigroup dropped -1.7% despite posting a revenue beat.
Looking ahead to this week, U.S. Federal Reserve Chair Jerome Powell will participate in a notable Q&A event on Tuesday alongside a Bank of Canada governor.
Additional remarks from other Fed officials throughout the week may impact traders' expectations for interest rate movements and contribute to potential swings on Wall Street.
Meanwhile, in the U.S. government bond markets, the yield on the 10-year Treasury, which helps set rates for mortgages and other economy-dictating loans, finished at 4.53%, while the policy-sensitive two-year yield, which tends to reflect market expectations of future Fed moves, closed at 4.91%.
In cryptocurrency news, Bitcoin, the largest digital currency, relinquished its hold on US$70,000.00 and experienced a nearly -5% decline. Its intraday range spanned from US$65,829.00 to US$71,226.00 before settling at US$67,390.00.
As the Bitcoin halving approaches, traders are undoubtedly eyeing potential opportunities ahead.
Despite current stabilization, there's anticipation for a bullish surge in Bitcoin's price, with projections suggesting it could range between US$78,000.00 and US$81,000.00.
However, this surge might be followed by a significant pullback, with Bitcoin potentially retreating to a range between US$56,000.00 and US$58,000.00.
The fourth Bitcoin halving event is expected around April 19, 2024.
Given this assessment, traders and investors should exercise caution as volatility is expected to be high.
It's essential to closely monitor any new developments while navigating potential trading strategies amidst market fluctuations.
Meanwhile, Ethereum, the second-largest blockchain in terms of cryptocurrency market capitalization, showed weakness, trading within a daily range of US$3,100.00 to US$3,541 before closing at US$3,262.00.
Precious metal prices experienced volatility, with spot gold reaching an intraday high of $2,431 before reversing and closing at $2,343 per ounce. Meanwhile, silver closed lower at $27.86.
Energy market prices exhibited weakness, with the global benchmark Brent crude oil reaching $90.20 per barrel, while the US benchmark West Texas Intermediate settled at $84.82.
The U.S. Dollar Index (U.S. DXY), which measures the dollar's strength against six major foreign currencies in the forex market, was firmer at 106.01.
Meanwhile, the Eurodollar was 1.0640, and the British pound finished at 1.2448. The Japanese yen ended at 153.18, while the Australian dollar was at 0.6460.
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