Yesterday, Wall Street had a tough time, with major stock indexes all taking a nosedive. The tech-heavy Nasdaq got hit hardest, dropping more than the others. Tom Hainlin at U.S. Bank Wealth Management summed it up: “It’s a rough day. The economy’s slowing down, and it’s not just about interest rate cuts.”
Despite this, Bitcoin nearly hit a new high before it lost some value, ending the day down 7.6% at $62,380. Chuck Carlson from Horizon Investment Services pointed out, “After a big run in stocks, people are moving their money elsewhere, looking for returns.” Gold was another winner, hitting a record high, thanks to bets that the Fed might cut interest rates soon. This expectation comes from weaker economic data pointing to a less supportive environment for the dollar, which in turn boosts gold, Hainlin added.
Economic reports revealed a slowdown in the U.S. services sector and a bigger drop in new factory orders than expected. The Dow Jones dropped over 400 points, the S&P 500 lost over 50 points, and the Nasdaq was down by almost 270 points. Europe didn’t fare much better; stocks fell after China’s efforts to boost its economy didn’t impress. The pan-European STOXX 600 and MSCI’s global stock index both saw declines, as did emerging market stocks and the Asia-Pacific shares outside Japan. Japan’s Nikkei barely moved.
The dollar dipped against a bunch of major currencies after the disappointing U.S. data. The euro and the yen saw slight gains against the dollar, while the British pound also increased a bit. U.S. Treasury yields hit a one-month low, with both the 10-year and 30-year bonds seeing prices rise as yields fell. This is as investors looked ahead to the upcoming jobs report.
Oil prices dropped too, with U.S. crude and Brent crude both falling amid doubts over China’s economic growth plan. But gold kept shining, hitting an all-time high as people bet the Fed would start cutting rates in June. The precious metal’s price rose 0.7% to over $2,129 an ounce.
Stocks have been struggling ahead of some key economic reports coming up. The major U.S. indexes all fell, continuing a downward trend from the day before. This follows a period of gains that had taken the S&P 500 to new highs earlier in the year. Bitcoin, however, managed to hit a new record since late 2021, briefly surpassing $69,000 before falling back.
Meanwhile, the Nasdaq was down by about 1.7%, and the Dow dropped by 0.8%, or roughly 300 points. Notably, the biggest tech companies, often called the “Magnificent Seven,” all saw their shares fall. On a brighter note, Target’s stock jumped after the retailer reported an increase in net earnings. In contrast, GitLab’s shares took a hit after the company provided a disappointing outlook.
Gold’s price continued to climb, building on its high from Monday. Meanwhile, the yield on the 10-year Treasury note fell slightly, following a settle at 4.218% the day before. In Asia, Hong Kong’s Hang Seng Index dropped, but shares in mainland China saw some improvement. This came after the Chinese government set a goal for around 5% economic growth in 2024, despite facing major challenges.
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