In part, the sell-off was due to weak economic data out of the United States
Wall Street stocks witnessed an ugly session overnight, suffered their worst day of the year after having rallied the previous day following a less-hawkish Fed decision. The S&P 500 fell by 3.6%, the Nasdaq was down 5.0%, and the Dow gave up 3.1%. Tech stocks were leading the losses, with Amazon dropping 7.56% and Tesla falling 8.33%. In part, the sell-off was due to weak economic data as US productivity dropped in the first quarter by the most since 1947 while initial jobless claims came in at 200,000 versus 179,750 estimate.
Asian equity markets followed Wall Street lower on Friday. The Shanghai Composite Index fell 2.16%, Hong Kong’s Hang Seng plunged 3.67%, and the Kospi in Seoul tumbled 1.23%. Bucking the trend, the Nikkei 225 in Tokyo edged 0.69% higher as trading resumed after a prolonged holiday. In general, markets remain volatile and risk-sensitive as the conflict in Ukraine continues and worries about the economic outlook persist.
In Europe, stocks opened lower to start the day as sluggish tones persist in the market after yesterday’s sell-off in the US. The pan-European Stoxx 600 gave up 1% in early deals, with almost all sectors trading in negative territory. US stock futures pointed to further selling in early premarket trade as investors shift focus to the upcoming US jobs report. The data is expected to show that the economy created 391,000 jobs in April.
Meanwhile the safe-haven dollar continues to rally amid economic concerns, with the dollar index notching fresh 20-year highs around 104.00 on Friday morning. After the initial spike, the buck has retreated somewhat in recent trading and could see a deeper short-term correction as six Fed speakers will deliver comments on the economy and monetary policy after the NFP release.
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