What happened in the markets - 19-23 June 2023
What happened in the markets last week?
Here are the updates about the US market last week, according to CNBC:
The Dow Jones Industrial Average fell 2.14%, to close at 33,727.43.
The S&P 500 lost 2.09%, to 4,348.33.
The Nasdaq Composite declined 2.64%, to 13,492.52.
The declines came as investors digested a mixed bag of economic data. On the one hand, the Labor Department reported that job growth in May was stronger than expected. However, the Commerce Department said that retail sales fell in April.
Powell's remarks on Wednesday indicated the likelihood of more rate hikes in an effort to combat inflation. The Federal Reserve recently refrained from raising rates after ten consecutive hikes but hinted at the possibility of two more quarter-percentage point increases later this year.
Here are some of the factors that weighed on the markets last week:
Rising inflation
Concerns about a recession
Weak economic data
Rising interest rates
The markets are likely to remain volatile in the near term as investors continue to assess the economic outlook.
Which companies were affected?
The performance of stocks and companies varied. Some stocks performed well, while others performed poorly. Here are a few examples:
Energy stocks: Anxiety about economic growth prospects and energy demand weighed on prices of crude oil, which fell nearly 4% for the week, affecting stocks like Chevron (CVX) and Exxon (XOM).
Technology stocks: Several major tech stocks that had seen significant gains due to enthusiasm around artificial intelligence also pulled back. Companies like Microsoft (MSFT), Tesla (TSLA), and Nvidia (NVDA) faced declines in their stock prices, driven by the impact of higher interest rates on investments. NVDA, despite being a major beneficiary of the artificial intelligence (AI) boom, saw a 1.9% decrease. However, it remains up by nearly 189% for the year so far.
Retail stocks: CarMax (KMX), an automotive retailer, witnessed a 10.1% surge in its stock price after reporting stronger-than-expected profits for the latest quarter.
Cryptocurrency stocks: Coinbase, a cryptocurrency trading platform, also experienced a 6.9% increase following a Supreme Court ruling in its favor regarding arbitration with a customer.
Here are some other factors that could affect the performance of stocks and companies in the near term:
The outcome of the war in Ukraine
The state of the global economy
The direction of interest rates
The performance of earnings reports
While the broader market was impacted, the tech sector bore the brunt of the decline. Other sectors, such as manufacturing and services, faced challenges as well. High interest rates had already dragged manufacturing and other industries into contraction, and concerns grew about the potential dampening effect on the service sector.
Source: CNBC
