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Global Economic Pause Market Bull Run: Nasdaq, S&P 500 Slip

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Dow Jones climbs but Nasdaq and S&P 500 decline – here’s what happened in the markets. 

Global concerns over economic growth led to mixed results for US stocks on Wednesday. Despite unexpected events such as a Canadian interest rate hike, a drop in Chinese exports, and warnings from OECD, the Dow Jones Industrial Average gained slightly while the S&P 500 and Nasdaq suffered losses.

Stock markets experience mixed results as the energy sector rises by over 2.6%. While the S&P 500 and Nasdaq Composite declined, the Dow Jones Industrial Average added 0.27%.

The SPDR S&P Oil & Gas Exploration & Production ETF and First Trust Natural Gas ETF were top performers, each gaining over 3%.

Tech giants Alphabet Inc. (GOOG) and Microsoft Corporation (MSFT) caused a dip in the Nasdaq 100 (^NDX) by falling about 3% each, after their recent contribution to the S&P 500’s nearly bull market before slipping on Wednesday.

Regional banks continue to soar as the KRE ETF rises over 3%. PacWest Bancorp enjoys a 14.4% climb and Zions Bancorporation sees a 4.5% increase.

Meanwhile, the S&P 500 has gained over 7% in the last three months, thanks to the rise of artificial intelligence.

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Global Market Conditions

The Bank of Canada raised its interest rate by 25 bps. Meanwhile, China’s post-pandemic recovery is causing concern as its exports slumped 7.5% in May, leading to a potential need for new stimulus measures. 

The OECD has slightly lifted its global growth forecast for 2023, but inflation and interest-rate hikes may still drag on the economy. Treasury yields rose due to the US Treasury’s plan to boost the size of its bill sales, putting pressure on short-dated bonds. Meanwhile, mortgage rates are weakening demand in the housing market. 

Investors are also monitoring the Securities and Exchange Commission’s crackdown on cryptocurrency exchanges, with Bitcoin’s price trading below $27,000. 

Tesla’s stock rose more than 1% as the Environmental Protection Agency excluded EV makers from the Renewable Fuels Standard.

Skilling

United Natural Foods Inc. and Campbell Soup both missed their earnings targets, leading to substantial drops in their stock prices.

UNFI’s Q3 profits fell below expectations and the company had to cut its full-year outlook. Meanwhile, CPB’s earnings guidance also fell short of Wall Street predictions.

On a brighter note, Netflix’s shares are on the rise thanks to predictions from JPMorgan analysts. Their estimate suggests that the company’s recent password crackdown will bring in an extra $6 billion in revenue between 2024-2025.

In other news, Affirm Holdings announced a partnership with Amazon Pay, causing their stock to climb over 3%.

GameStop is set to report earnings after hours on Wednesday, and their shares have already risen over 5%. 

Stay tuned for updates.

Investors anticipate the Federal Reserve to hit the brakes next week by leaving the fed-funds rate untouched. The central bank’s decision comes after a remarkable stretch of aggressive rate hikes that raised the interest rate from near zero to 5.25% since March 2022.

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Author

  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.