Investors took profit in the overheated market that suffered the third bearish session in a row
Wall Street stocks sank to four-week lows overnight, with the sell-off in the tech sector spreading across the markets, sending the Nasdaq down over 4%. Investors continued to take profit in the overheated market that suffered the third bearish session in a row. In individual stocks, Tesla suffered the worst plunge in its history, having lost over 21% on Tuesday. Now, the company’s shares are down 34% since the start of this month. Apple stocks plunged nearly 7% and gave up 14% as a result of a three-day slide. The S&P 500 index fell 2.8% and the Dow Jones lost 2.24%.
Asian stocks followed suit on Wednesday a selloff of big technology stocks on Wall Street kept investors worried along with a talk by Trump of “decoupling” the U.S. economy from China. In Tokyo, the Nikkei 225 lost 1.03%, the Hang Seng in Hong Kong dropped 0.63%, Australia’s S&P/ASX 200 tumbled 2.15% and the Shanghai Composite index shed 1.86%.
In Europe, equities opened little changed but managed to reenter the positive territory after some hesitation as U.S. stock futures pointed to a bounce. Still, downside risks continue to persist, and the sell-off could reemerge at any point later today. So far, major regional indexes are gaining over 1%. Now, investors shift focus to the upcoming ECB meeting due on Thursday. The central bank could indicate that downside risks have intensified in the Eurozone. If so, stocks could suffer losses along with the euro.
EURUSD remains under pressure, changing hands just marginally above the 1.1750 support zone on Wednesday. Risk sentiment has improved somehow in recent trading, suggesting the safe-haven dollar demand could wane in the short term. However, traders will hardly dare to push the common currency higher ahead of the ECB meeting that could dent the euro’s appeal.
Elsewhere, crude oil prices are making modest recovery attempts on Wednesday after yesterday’s plunge to three-month lows around $39.30. Brent crude regained the $40 handle in recent trading as risk aversion has abated somehow. Still, downside risks persist, and the futures could resume the decline after a short-lived pause.
