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Nvidia, which should have been celebrating the start of its annual developer conference, saw its shares fall instead. Tesla, still reeling from Elon Musk's latest adventures, took a hit from RBC, which lowered the company's target price. Alphabet, continuing its strategy of expensive acquisitions, lost ground following the announcement of its $32 billion deal with Wiz. As a result, the Dow Jones dropped by 0.62%, the S&P 500 fell by 1.07%, and the Nasdaq plunged by 1.71%.
This market turbulence is largely driven by anticipation surrounding the Federal Reserve's decision. The Fed remains cautious about cutting interest rates, even though markets have already priced in a 60 basis point reduction this year. The regulator insists that it will first assess the economy before deciding whether to act. Meanwhile, inflation surprised again, with rising import prices fueling concerns among investors. Follow the link for details.
All major indices ended in the red: the Dow Jones dropped by 0.6%, the S&P 500 lost 1.1%, and the Nasdaq slumped by 1.7%. The S&P 500 index closed at 5,614 points, staying within the 5,500–6,000 range. After two positive sessions, investors may have expected a breather, but that was not the case. Market leaders such as Tesla (-5.3%), Nvidia (-3.4%), Meta (-3.7%), and Alphabet (-2.3%) dragged the indices down, despite the significant news developments.
Trump's phone conversation with Putin did not yield the expected effect. The White House reported on the talks, stating that the two leaders discussed a potential ceasefire, but Trump clearly expected more. Typically, he seizes the opportunity to share triumphs on social media, but this time, there was an extended silence. Perhaps he was hoping for an immediate truce, considering that his envoy Witktoff had just spent several hours in Moscow for negotiations. But the miracle did not happen — and the market noticed. Follow the link for details.
Once considered the world's economic center, the United States is now facing the consequences of its actions, with capital flowing out of the country and the S&P 500 down 8.6% from its February highs. In monetary terms, this represents a loss of $5 trillion in market capitalization. Who is to blame? Partly Washington itself: in response to Donald Trump's return to the White House, 20% tariffs were imposed on China.
The dynamics of capital inflows are also telling. Investors controlling $426 billion have cut their exposure to US stocks by 40 percentage points, the most on record. Their allocation to US equities now stands at just 23%, the lowest since June 2023. In contrast, Europe is seeing capital inflows, with the proportion of European stocks in portfolios reaching its highest level since 2021. Follow the link for details.
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