Fragile Sentiment Leaves Investors on Tenterhooks
Team Veye | 07-May-2025
Mixed signals on progress of trade talks and fading interest rate cut hopes as the Fed Reserve’s policy meeting commences ushered in frustration among the investors.
The futures market pricing was sending strong signals of a very weak chance of an impending rate cut decision in the current meeting.
MSCI’s global equities gauge fell on Tuesday even as oil futures rebounded from earlier sell-off on Monday. Oil, which had fallen to a four year low on Monday, gained 3% on indications of higher demand in Europe and China, lower production in the U.S., tensions in the Middle East.
The day witnessed the Dow Jones Industrial Average falling by 390.14 points or 0.95%. The S&P 500 lost 0.47% with Nasdaq Composite declining by 154.58 points or 0.87% to close at 17,689.66.
Market participants were concerned about the ongoing trade tensions between the U.S. and the rest of the world, particularly with China, the world’s second biggest economy after US.
Trump’s tariff policies are having another fall out on US Dollar, which continues to encounter selling pressure since April. This is resulting in the decline of the dollar index, a measure of dollar against prominent currencies including the yen and the euro.
Source - Reuters
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