Latest news with #CBOEVolatility
Perth Now
30-04-2025
- Business
- Perth Now
Wall St slips as US economy contracts in first quarter
Wall Street's main indexes have dropped after data showed the economy contracted for the first time in three years in the first quarter, deepening concerns about the effects of US tariffs and the global trade war. Private payrolls growth also slowed more than expected in April, while the personal consumption expenditure index - the Federal Reserve's preferred inflation gauge - rose slightly more than expected in March on an annual basis. Wednesday's reports join a series of data releases over the month that have pointed to an increasingly uncertain outlook for the US economy, as the fallout from the administration of US President Donald Trump's steep tariffs and erratic trade policy take effect. "Given the amount of damage that's been done to businesses (and) consumer confidence, we could just be getting started on seeing a continuation of these weaker numbers," said John Luke Tyner, portfolio manager at Aptus Capital Advisors. US consumer spending jumped last month as households rushed to buy motor vehicles to avoid higher prices and shortages due to tariffs. Traders are now pricing in a full percentage point interest rate cut by the end of the year from the Fed. Caterpillar declined marginally, after gaining pre-market following its quarterly results. In early trading on Wednesday, the Dow Jones Industrial Average fell 699.90 points, or 1.73 per cent, to 39,827.72, the S&P 500 lost 113.47 points, or 2.04 per cent, to 5,447.36 and the Nasdaq Composite lost 449.75 points, or 2.58 per cent, to 17,011.57. All S&P 500 sectors were in the red, with consumer discretionary and information technology shares down 3.6 per cent and 2.3 per cent, respectively. The CBOE Volatility index, seen as Wall Street's fear gauge, was up 3.53 points at 27.69 - its highest in nearly a week. "Magnificent Seven" members Meta Platforms and Microsoft fell 2.0 per cent and 3.0 per cent ahead of their results, due after markets close, that investors are watching closely for clarity on the outlook for the tech sector and AI-focused investments. Fanning concerns about a pullback in investments into AI, Super Micro Computer cut its third-quarter forecasts due to delays in customer spending while Snapchat parent Snap said it would not provide a second-quarter financial forecast. Their shares fell more than 16 per cent each. Wall Street's indexes recouped some ground this month after a sharp slump following the April 2 "Liberation Day" tariff announcements, but are set for monthly declines. The S&P 500 is set to snap its best winning streak since November if losses hold through close. Wednesday also marks 100 days since Trump took office. Erratic changes in trade policies and uncertainty have roiled markets over that period, offsetting initial optimism over the administration's business-friendly policies. "If you were looking for a playbook on how to slow a healthy economy, (policy changes) seem like a good example," said Scott Helfstein, head of investment strategy at Global X. Among other stocks, Norwegian Cruise Line Holdings tumbled 10 per cent after missing first-quarter earnings estimates. Declining issues outnumbered advancers by a 7.61-to-1 ratio on the NYSE and by a 4.77-to-1 ratio on the Nasdaq. The S&P 500 posted 2 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 14 new highs and 57 new lows.
Zawya
04-04-2025
- Business
- Zawya
US Stocks: Wall Street ends with heavy losses as Trump tariffs ignite global recession fears
Wall Street benchmarks slumped on Thursday, ending with the largest single-day percentage losses in years, as U.S. President Donald Trump's sweeping tariffs ignited fears of an all-out trade war and a global economic recession. A combined $2.4 trillion in stock market value was wiped off of S&P 500 companies, as the benchmark suffered its largest one-day percentage decline since June 2020. The Dow Jones Industrial Average has also not had a worse one-day collapse since June 2020, while the Nasdaq Composite posted its largest percentage decline on any day since the coronavirus pandemic sent global markets into a tailspin in March 2020. The trigger was Trump's 10% tariff on most U.S. imports and much higher levies on dozens of other countries, which threaten to unleash a global economic upheaval. Investors sold positions to reflect the new economic reality, with concerns about how other countries would react to Trump's proclamations from the White House. China vowed retaliation, as did the European Union, which faces a 20% duty. South Korea, Mexico, India and several other trading partners said they would hold off for now as they seek concessions before the targeted tariffs take effect on April 9. Wild swings are expected in the coming days: the CBOE Volatility index, known as Wall Street's fear gauge, closed above 30 points for the first time since August. "There are still a lot more questions than answers out here," said Steven DeSanctis, small and mid-cap strategist at Jefferies Financial Group. The S&P 500 lost 274.45 points, or 4.84%, at 5,396.52 points, while the Nasdaq Composite dropped 1,050.44 points, or 5.97%, to 16,550.61. The Dow Jones Industrial Average fell 1,679.39 points, or 3.98%, to 40,545.93. The tariff-triggered bloodbath on Wall Street stood in stark contrast to the initial optimism after Trump's reelection in November, when the promise of business-friendly policies propelled U.S. stocks to record highs. High-flying technology stocks, which had helped push benchmarks to record highs in recent years, suffered heavily on Thursday. Apple sank 9.2%, its worst one-day performance in five years, reeling from an aggregate 54% tariff on China, the base for much of the iPhone maker's manufacturing. Nvidia slumped 7.8%, and dropped 9%. Traders are ramping up expectations for the Federal Reserve to cut interest rates. "The Fed does have considerable firepower to help the market," said George Bory, chief investment strategist for the fixed income team at Allspring Global Investments. "The market is now pricing in more rate cuts, and perhaps sooner," adding an easing in June now seemed guaranteed, with the chance of a cut in May as well. That heightens the significance of Friday's payrolls data and Fed Chair Jerome Powell's speech the same day, which could offer crucial insights into the U.S. economy's health and the future path of interest rates. Retailers were hit hard, with Nike and Ralph Lauren falling 14.4% and 16.3%, respectively, on a raft of new tariffs on major production hubs including Vietnam, Indonesia and China. Big banks, which are sensitive to economic risks, fell. Citigroup, Bank of America, and JPMorgan Chase & Co all dropped between 7% and 12.1%. The U.S. small-cap Russell 2000 index tumbled 6.6%, its worst one-day drop since the pandemic's onset, underscoring concerns about the health of the domestic economy. "Small-cap companies tend to be suppliers to the large-cap companies, so as things go bad for the large-cap names because of tariffs, they are going to put a lot of pressure on their small-cap suppliers," said Jefferies' DeSanctis. The energy index sank 7.5%, the heaviest decliner among the 11 S&P sectors, as crude prices slumped 6.8% on the tariffs and OPEC+ speeding up output hikes. The one sector not in the red was consumer staples , which gained 0.7%. Traditionally considered a defensive play, it was also buoyed on Thursday by Lamb Weston , which advanced 10% after reporting earnings. Volume on U.S. exchanges was 20.90 billion shares, compared with the 16.13 billion average for the full session over the last 20 trading days. (Reporting by Sruthi Shankar and Pranav Kashyap in Bengaluru and David French in New York; Additional reporting by Nupur Anand; Editing by Saumyadeb Chakrabarty, Anil D'Silva, Shounak Dasgupta and Richard Chang)
