Tech Sector Drags Wall Street lower, Dollar Softens

Equities

Major US indices finished the session deep in the red territory dragged down by the weak performance of the tech sector. In general, the stock market is being affected by global growth fears, trade tensions with China, and rising interest rates. The Nasdaq futures lost 2.9% to a three-week low of 6674, the Dow Jones Industrial Average futures dropped 1.3% to 25042, and the S&P500 futures fell 1.3% to 2696. Facebook, Amazon, Apple, Netflix, and Google (FAANG) are now more than 20% down from their all-time high posted in September and entered in a bear market.

USD

The Dollar Index which measures the greenback against a basket of major currencies ended lower for the second consecutive day at a two-week low of 96.17. Last week, the Fed Vice-Chairman Richard Clarida triggered a round of dollar selling when he described the current situation. He said that interest rates are approaching their neutral level, and the US economy is solid, but there are signs of a slowdown and the Fed should reassess the interest rate path. Yesterday the housing data came out to provide an additional sign that the economic activity is slowing down. The US homebuilders' sentiment recorded its steepest one-month drop in more than four years which suggests that higher interest rates are affecting the demand in the housing market. The USDJPY lost 0.2% to 112.54, and the EURUSD gained 0.3% to $1.1453.

Metals

Gold prices advanced for the fifth consecutive day, supported by the drop in the US dollar, Treasury yields, and the stock market. The gold ounce added 0.2% to $1224, and the silver ounce gained 0.7% to $14.40.

Oil

Oil prices are trading in a tight range amid expected OPEC supply cuts and weaker global economic activity. The West Texas Intermediate crude futures rose 0.5% to $57.35, and the Brent futures lost 0.1% to $66.91. Market participants await the weekly crude oil stock by the American Petroleum Institute later today.

Major Economic Events

 
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