Indices, Tech, Banks & Gold: What’s Moving the Market?

While the market is known for its volatility, the past couple of months have been more volatile than usual as factors ranging from the banking stocks’ crisis to inflation and monetary policies added pressure to the economy. 

However, whereas some market sectors fall in face of economic woes, some have proven to be more resilient. From Gold (XAU) to AI stocks and Wall Street indices, here’s how the different market sectors have reacted recently.

Wall Street Indices’ Rollercoaster Ride

This week has been especially shaky and volatile for major Wall Street indices like the Dow Jones Industrial Average (USA 30), the Nasdaq (US-TECH 100), and the S&P 500 (USA 500). As these major indices opened the week with a rally on Monday night. The S&P 500 was driven by gains from energy stocks that rose after OPEC + announced Oil production cuts and rose by 0.37%, the Dow Jones gained 0.98% while the Nasdaq fell by 0.25% on Monday. Oil (CL) along with energy-related stocks like BP (BP-L) rallied on Monday following OPEC’s announcement as it soared by 6.2% and 4.4% respectively. 

Nonetheless, the fortunes turned on Tuesday as the rally did not persist due to renewed recession fears. These fears were ignited by weak February US job openings data reaching the lowest level in 2 years, perhaps indicating that employment is on a slump. The Job Openings and Labor Turnover Survey (JOLTS) which was published on Tuesday, is an important economic indicator and gauge of financial health as it shows the number of open jobs, layoffs, and other factors. While it is no secret that layoffs were an ongoing motif throughout the past months, as companies from tech to banking faced economic challenges with layoffs, the recent jobs opening data was lower than expected which may have created market jitters.  The data revealed that job openings dropped to 9.9 million by the end of February, a loss of 632,000 from January. This is the lowest labor data since May 2021. 

This less-than-stellar information may have deterred investors and traders from Wall Street indices and stocks which, in turn, halted Monday’s rally. As a result, the S&P 500, the Nasdaq, and the Dow Jones all wiped 0.58%, 0.52%, and 0.59% respectively on Tuesday. Tech stocks which tend to be more vulnerable to economic uncertainty also reacted as chip giant NVIDIA (NVDA) dropped by 1.78%.  (Source:Reuters)

Is the Banking Turmoil Far From Over?

Tuesday’s pressures were also felt across banking stocks which had to grapple with their own hurdles last month following Silicon Valley Bank (SVB) announcing its bankruptcy which led to other major banks falling. Nonetheless, in addition to the overall recession fears yesterday, JPMorgan (JPM) CEO, Jaime Dimon revealed in a letter to the big bank’s shareholders that the banking sector’s crisis is far from ending and may persist for years. In response, big banks JPMorgan Chase, Bank of America (BAC), and Wells Fargo (WFC) lost 1.3%, 2%, and 2.4% yesterday. 

Investors Turn to Gold?

Whereas many market sectors tend to react negatively to recession fear and economic uncertainty, Gold may have proven has proven many times its ability to be more resilient than other market assets. This is because, to many, Gold is considered a safe-haven asset as it is believed that it tends to retain its value or appreciate in value in times of economic turmoil. 

Accordingly, it seems that investors and traders have turned to Gold on Tuesday following the less-than-optimistic economic data release and the increasing recession fears. As a result, bullion soared substantially as it gained 1.8% on Tuesday and surpassed the $2,000 price mark. Moreover, as of the time of the writing, on Wednesday morning, it seems that Gold is sustaining growth as it gained 0.1% since yesterday. Silver, which is also considered a safe-haven precious metal, also sparkled as it gained about 4% since Monday and as of the time of the writing. 

In weeks to come, traders, investors, and analysts may want to keep a keen eye on any upcoming economic events and data to see if any major changes will materialize and to understand what may shift the markets’ trajectories in the near future. As for this week, the upcoming US Nonfarm Payrolls Data on Friday, April 7th, may also reveal a lot about the health of the world’s biggest economy. Therefore, keeping track of this upcoming release can be helpful to traders and market participants.