Nasdaq Tumbles as Investors Shift to Cyclical Stocks

Equities

Futures tied to US stock index futures had a mixed performance during the first trading session of May. Investors seemed to favor again cyclical stocks against tech stocks, repeating the theme that kicked off in February. Several states continued to move forward with lifting restrictions on the activity as the US vaccination program goes perfectly well. Cyclical stocks which suffered significantly over the past year from lockdowns could still have room for opportunities relative to growth stock that logged an outstanding performance last year. The Dow Jones Industrial Average futures rose to 34114, the S&P500 futures fell to 4172, and tech-heavy Nasdaq plunged to 13721.

USD

The dollar index which measures the greenback against a basket of major currencies inched higher to 91.36, recovering from yesterday's plunge. The buck declined as the ISM Manufacturing PMI for April missed estimates due to shortages in raw material, driving yields lower, where the 10-year Treasury yields fell to a one-week low of 1.582%. But if we have a closer look at the price component, it soared significantly which warns of inflation. Later, yields recovered and pushed the dollar higher. The EURUSD fell to $1.2007, the GBPUSD dropped to $1.3851, and the USDJPY rallied to 109.45

Metals

Precious metals prices rallied significantly yesterday but surrendered gains as the dollar recovered along with Treasury yields. The price of a gold ounce dipped to $1784 after trading as high as $1797, the price of a silver ounce eased to $26.78, while palladium continued to hover near an all-time high of $3000.

Oil

Oil prices inched higher amid optimism over the economic recovery in the United States and the Euro region. However, the market remains fragile on soaring coronavirus cases around the world, which would disrupt the oil-demand recovery. The West Texas Intermediate crude June contract is hovering near $64.50, and Brent blend July contract is trading near $67.70.

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