Stock markets in the U.S. experience significant drops - Euro and gold prices gain strength
On Friday evening, U.S. stock markets experienced a notable dip, with the Dow Jones Industrial Average closing at 25,015.55 points, marking a decrease of 2.84 percent compared to the previous trading day. The S&P 500 was down around 3,005 points (-2.47 percent) minutes before the close of trading, while the Nasdaq 100 calculated the Nasdaq at around 9,920 points (-1.79 percent).
The significant dip in U.S. stock markets was mainly caused by a tech-led selloff reflecting a mild correction after a strong rally in AI-related stocks. This corrective reaction was compounded by investor uncertainty ahead of the Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Symposium. The speech was anticipated to signal potential changes in interest rate policy, particularly the possibility of rate cuts, which influenced market sentiment negatively ahead of the event.
Additionally, concerns about a shift in market leadership away from mega-cap tech stocks, similar to patterns before the dot-com bubble burst, and broader economic worries such as weakening labor market data and slow GDP growth have contributed to the cautious sentiment among investors. The concentration of gains in the top 50 S&P 500 stocks is prompting fears a bubble might be nearing its end, increasing volatility.
Furthermore, tariff uncertainties and elevated tariffs impacting import costs with major trading partners added to the market's hesitation. These geopolitical and trade issues could weigh on corporate earnings and economic growth projections.
In contrast, gold prices benefited on Friday evening, with an ounce of fine gold trading at 1,771.41 US dollars, representing a 0.43 percent increase. The European common currency showed some strength on Friday evening, with one euro worth 1.1229 US dollars, marking a 0.11 percent increase.
A photo of Wall Street, taken by dts News Agency, captures the mood of the day. As the markets continue to navigate these challenges, investors and analysts will closely watch the unfolding events for signs of market recovery or further turbulence.
Investors are unsure about potential changes in interest rates, as they await Jerome Powell's speech at the Jackson Hole Symposium, which could impact the stock-market's future. The concentration of gains in the top 50 S&P 500 stocks has raised concerns about a bubble in the other finance sector, prompting investors to consider alternative avenues for investing, such as gold.
