US Stocks Smashed Ahead of Big Week – Nasdaq down 2.7%
US stocks were smashed in trading on Friday as the inflation data came in stronger than expected and global growth concerns continued to weigh on investor sentiment. The Dow dropped 1.7%, the S&P 1.99%, while the Nasdaq took the biggest hit, losing 2.71% on the day. US Treasury yields also fell hard as flows continued into bonds; the 2-year lost 7.8 basis points to move down to 3.912%, and the 10-year fell 11 basis points to 4.249%. The dollar dropped against the usual basket of currencies, with the DXY down 0.22% to 104.04. Oil prices dipped, Brent off 0.54% to $73.63 and WTI down 0.80% to $69.36, while gold continued to power higher to notch up more fresh highs, up 0.91% to $3,084.19 an ounce.
Data vs Tariffs in the Week Ahead
Fundamental data will go head-to-head with geopolitical news in the week ahead to see which will dominate investor sentiment. All eyes are, of course, on the US markets, and this week could prove to be pivotal in shaping the way forward for markets for the next quarter, if not the rest of the year, as we get key updates from the US government on tariffs, as well as some major data updates, including the key US employment data on Friday. Geopolitical updates have definitely been having the biggest impact on market moves over the last few weeks, but if we can start to see some certainty in US plans this week, we could see fundamental updates starting to factor more strongly. Most traders, however, feel that we are probably in for more volatility in the short term at least—this week especially—if data prints are off expectations and combine with newswire headlines on trade and tariffs.
Busy Trading Day to Kick off a Big Trading Week
Traders are bracing for more volatility in the sessions and days ahead this week, and comments from President Trump over the weekend in the US have already seen some moves on the Asian open today. The macroeconomic event calendar also has plenty of scheduled data, which should add to the mix. The initial focus in the Asian session today will be on Chinese markets, with key Manufacturing and Non-Manufacturing PMI data due out; expectation is for prints of 50.4 and 50.5 respectively, and anything significantly off these should see further moves in markets. Key German inflation numbers are due out in the London session today, with the individual German states reporting their CPI data separately across the day. Expectation is for the final number to show a 0.3% month-on-month increase. There isn’t much on the cards in the US session today, with just the Chicago PMI data out, so expect geopolitical updates to dominate again before we see more major data updates in the States as we progress through the week.
