Tag Archives: U.S. markets

Sharp Volatility and Growing Concerns in Asian and U.S. Markets

Sharp Volatility and Growing Concerns in Asian and U.S. Markets: Amid recent developments in U.S. trade policy,
global markets experienced heightened volatility following  President Donald Trump’s
announcement of a new tariff package—mainly targeting auto imports.
These actions have reignited investor fears over the global economic outlook,
inflation, and commodity prices, directly impacting performance across Asian and U.S. markets.

 

Contents

Decline in Asian Markets

Mixed Signals from the U.S.

Wall Street Retreats

Dollar and Bonds Hold Firm

More Volatility Ahead

Liquidity Hits Two-Year Low

Summary

 

 

 

 

Decline in Asian Markets

Equity indices in China, Hong Kong, and Japan posted steep losses on Thursday.
U.S. stock futures also fell during early Asian trading hours.
At the same time, both the Mexican peso and Canadian dollar weakened, reflecting growing investor caution.

Toyota Motor led the losses in Asian trading. At the same time, General Motors and Ford Motor
shares declined in post-market U.S. trading due to concerns over potential tariffs affecting the auto sector.

 

Mixed Signals from the U.S. Administration

Trump’s unexpected announcement of a 25% tariff on imported vehicles sent market shockwaves.
However, he later suggested that tariffs might be “very flexible.”
The uncertainty remains high, especially regarding China and
the potential sale of TikTok (owned by ByteDance) to a U.S. company.

According to Kyle Rodda, market analyst at Capital.com, these developments “shook market confidence once again”
and raised questions about the longevity of the current protectionist stance.

 

Wall Street Retreats, Led by the ‘Magnificent Seven’

In the U.S., significant indices declined sharply. The S&P 500 fell over 1%, led by the “Magnificent Seven” tech giants:
 Apple, Amazon, Nvidia, Alphabet, Meta, Microsoft,
and Tesla are all heading toward their worst quarterly performance since 2022.

Nvidia and Tesla shares dropped by more than 5.5%,
while Microsoft declined after reports that it was pulling out of new data center projects in the U.S. and Europe.
The Nasdaq 100 fell 1.8%, the Dow Jones Industrial Average dropped 0.3%,
the Bloomberg Magnificent Seven Index lost around 3%, and the Russell 2000 slid by 1%.

 

 

 

 

Dollar and Bonds Hold Firm

Despite the broader sell-off, the U.S. dollar rose by 0.3%,
while the yield on 10-year U.S. Treasury bonds climbed to 4.35%.
Oil held onto commodity gains after a significant drawdown in U.S. inventories,
and gold remained near its record highs.

 

Warnings of More Volatility Ahead

Daniel Skelly, Head of Wealth Management Research at Morgan Stanley,
warned that volatility is here to stay—especially with the upcoming tariff deadlines.
He added that these announcements may mark the beginning of new negotiations rather than the end of trade tensions.

At the same time, analysts at Barclays, led by Venu Krishna,

revised their 2025 target for the S&P 500 downward—from 6600 to 5900 points,
citing pressure from tariffs and weakening survey data.

From City Index and Forex.com, Matthew Weller said that trade policy uncertainty
has undermined risk sentiment and could lead to a short-term bounce in the dollar and risk assets.
However, he noted such gains may not last unless clarity emerges around U.S. trade strategies.

 

Liquidity at a Two-Year Low

According to Deutsche Bank data, liquidity in S&P 500 futures contracts
based on the most active contract—has dropped to its lowest level in two years.

Dan Wantrobski from Janney Montgomery Scott said 2025 could prove challenging
for investors due to persistent geopolitical uncertainty and shifting liquidity conditions.
He added that recent recovery attempts in the market have begun to look “somewhat erratic.”
and emphasized maintaining caution until solid confirmation that the market has reached a bottom.

 

Summary

Trump’s shifting stance on tariffs has reignited market fears globally,
dragging down major indices like the S&P 500 and Nasdaq 100
and shares of key companies such as Tesla, Nvidia, Microsoft, Toyota, Ford, and General Motors.

Meanwhile, investors found partial relief in a stronger U.S. dollar,
rising bond yields, and stability in gold and oil prices
the next steps in U.S. trade policy will be critical in shaping future market direction.

 

Sharp Volatility and Growing Concerns in Asian and U.S. Markets

Strong Recovery in U.S. Markets Despite Pressures… Stock Indices Rise for the Second Day

Strong Recovery in U.S. Markets Despite Pressures… Stock Indices Rise for the Second Day:
At a time when many believed that U.S. markets were entering a downward spiral,
the indices rebounded for the second consecutive day, defying the recent correction wave that drove investors toward caution.
With industrial and energy stocks improving and recession fears easing,
Wall Street regained momentum amid an atmosphere of cautious optimism and anticipation regarding upcoming economic policies.

 

Contents

Broad-Based Rally in U.S. Stocks

Optimism Supported by Retail Sales Data

Market Movements

Signs of Market Stability

Conclusion

 

 

 

 

Broad-Based Rally in U.S. Stocks as Confidence Improves

U.S. stock indices continued their upward trajectory for the second straight day,
reinforcing the market’s recovery after a sharp 10% drop last week.
Gains in the industrial and energy sectors fueled the rally, as economic data,
Though weaker than expected, it eased concerns of an imminent recession.

Nearly 95% of companies listed on the S&P 500 posted gains despite
some pressure on significant tech stocks like Tesla and Nvidia.
The equal-weighted version of the index,
which gives companies like Target the same weight as Apple and outperforms the benchmark index.

 

Optimism Supported by Retail Sales Data

While recent economic data did not significantly alter investors’ expectations regarding the path of monetary policy,
mixed retail sales results provided relief, as consumer spending appeared resilient despite escalating trade tensions.

David Lefkowitz from UBS Global Wealth Management commented,
“Pullbacks during a bull market often present good buying opportunities.”
He added, “Recent volatility has been driven by heightened political uncertainty
at a time when investor positioning and sentiment were quite elevated.
However, we believe much of this has now been priced in.”

U.S. Treasury Secretary Scott Bessent, a former hedge fund manager,
also played down concerns over the recent market downturn, primarily as the U.S. works to reshape its economic policies.

Bessent stated on NBC’s “Meet the Press”: “Having worked in investing for 35 years,
I can tell you that corrections are healthy and normal.”
He added, “I’m not worried about the markets.
If we implement sound tax policy, deregulate markets, and ensure energy security,
the markets will perform exceptionally well over the long term.”

 

Market Movements

The S&P 500 rose by 1%, the Nasdaq 100 gained 1.1%, and the Dow Jones Industrial Average advanced by 1.2%.
The Russell 2000 index for small-cap companies climbed 1.4%.
Meanwhile, the combined return for the “Magnificent Seven” (Apple, Alphabet, Nvidia, Amazon, Microsoft, Meta, Tesla) declined by 0.5%.

The yield on 10-year U.S. Treasury bonds remained stable at 4.31%,
while the Bloomberg Dollar Spot Index fell by 0.3%.

 

 

 

 

 

Signs of Market Stability

According to Brett Kenwell of eToro, despite mixed retail sales updates,
the data could give investors some cautious optimism regarding consumer spending’s resilience in the coming months.
He noted, “If the consumer holds up, there’s a strong chance the economy will, too.”

These developments came as markets stabilized after the S&P 500 entered correction territory last week.
Traders reduced their bets on a further sharp sell-off.

Even before Friday’s strong rebound, investors had significantly unwound their hedges against further declines in the S&P 500.

Bloomberg data showed that the cost of buying protective puts against
a 10% decline in the SPDR S&P 500 ETF Trust
over the next three months, it dropped to its lowest levels since 2023,
compared to call options betting on a 10% rally.

 

Conclusion

While markets remain cautious in interpreting economic data and monetary policy expectations,
the recent rebound in U.S. indices reflects growing confidence in the economy’s ability to withstand current challenges.
As investors closely monitor retail sales trends and trade tensions,
markets are beginning to absorb recent shocks and move beyond last week’s panic.
With indices like the S&P 500 and Nasdaq continuing to post gains,
the key question remains: Are we witnessing the start of a new upward trend,
or are markets still trapped in a cycle of volatility?

 

Strong Recovery in U.S. Markets Despite Pressures… Stock Indices Rise for the Second Day

Mixed Performance of U.S. Indices

Mixed Performance of U.S. Indices: At the end of trading on Wednesday, U.S. markets’ indices showed mixed performance.
The Dow Jones Industrial Average rose by 0.59% and recorded a new all-time high.
In contrast, the S&P 500 Index fell by approximately 1.39%, and the Nasdaq Index dropped by about 2.76%.

 

Content:

Weak Growth in U.S. Production

Mixed Performance of U.S. Indices

Reasons for the Recent Strength of the Japanese Yen

 

 

 

Weak Growth in U.S. Production

Data released by the U.S. Federal Reserve for June showed that U.S. industrial production grew faster
than market expectations for the second consecutive month. Industrial production rose by 0.6% monthly,
compared to market expectations of only 0.3%.
The capacity utilization rate in the United States also increased to 78.8% in June,
higher than the market expectations of 78.6%.
It recorded 78.7% in May before being revised to 78.3%.

 

Mixed Performance of U.S. Indices:

At the end of trading on Wednesday, U.S. markets showed mixed performance in their indices.
The Dow Jones Industrial Average rose by 0.59% and recorded a new all-time high.
In contrast, the S&P 500 Index fell by approximately 1.39%, and the Nasdaq Index dropped by about 2.76%.

The communication, Oil & Natural Gas, and financial sectors saw gains.
In contrast, the technology, consumer services, and industrial sectors experienced losses,
leading to an overall decline in the general indices.

 

 

 

 

 

Reasons for the Recent Strength of the Japanese Yen:

In recent days, the U.S. dollar has seen a sharp decline against the Japanese yen.
This drop was due to repeated statements from members of the U.S. Federal Reserve suggesting a less aggressive monetary policy stance.

For instance, Federal Reserve member Waller mentioned that inflation data
has boosted confidence in the central bank’s ability to achieve its 2% inflation target.
He also indicated the possibility of slowing wage growth per this target.

Simultaneously, the Japanese yen received explicit support from statements made by Masato Kanda,
Japan’s Vice Minister of Finance for International Affairs.
Kanda warned about the yen’s depreciation and stressed that the relevant Japanese authorities
would not hesitate to respond appropriately if speculators caused excessive volatility in the foreign exchange market.

These statements from the Japanese official provided clear support for the yen against the dollar during the trading session.

 

Mixed Performance of U.S. Indices