US Tech Stocks Smashed – Nasdaq Down 2.8%
Markets experienced a hard day yesterday in the US as tech stocks took their worst beating since 2020 after a report advised that the US could increase curbs on exports of semiconductors to China and Donald Trump talked about charging Taiwan for defense. The S&P and Nasdaq both took a big hit on the day, closing down 1.40% and 2.77% respectively while the Dow up 0.59% at another record high. US treasury yields continued to edge lower, the 10-year losing 2 basis points to 4.146% and the 2-year off 1.6 basis points to 4.430% and the dollar took another hit losing 0.52% on the index with the UsdJpy notably taking a near 2% dive on the day. Oil prices jumped as US stockpiles decreased much more than expected, Brent up 1.6% to $85.08 and WTI gaining 2.6% to $82.85 a barrel and Gold dropped off after hitting another record level during trading to eventually close the day down 0.6% at $2,455 an ounce.
Yen Intervention Pushing the Currency Higher
Japanese authorities are likely to be congratulating themselves on a job well done with the Yen at much more elevated levels than just a few days ago. There is no doubt that there has been a lot of Yen bought by the Bank of Japan, but the timing on this occasion has worked well with a change in the underlying fundamentals, especially against the US dollar. Weaker data prints out of the US, a significant drop in US yields and a jump in Federal Reserve rate cut expectations have all contributed to a near 4% drop in the UsdJpy in the 7 days. Geopolitical concerns, which have heightened considerably in the last few days have also aided the move as haven trades do tend to see moves in the Yen. The pair dropped over 3 big figures in the last day and traders are now expecting more volatility and trading opportunities in the sessions ahead with the bias definitely having moved to more downside potential.
Another Big Trading Day Ahead for Investors
Investors are expecting another busy day ahead in financial markets today after a tumultuous day on Wall Street. The focus will be on Australian markets early in the APAC day with the highly anticipated employment numbers due out from Canberra in the morning, expectation is for a 20k increase in jobs last month and for the unemployment rate to tick up to 4.1%. The European session is set to be a busy one for traders with employment data out from the UK early in the day before the focus moves across the channel for the ECB rate call and press conference. The US session is set to be another hectic one with more focus likely on the newswires and any political updates as well as the usual weekly unemployment claims data and the Philly Fed Manufacturing Index number later in the day.
