The blue-chip index Dow Jones Industrial Average finished the Friday session with a slight decline at the end of a tumultuous week on Wall Street.
The index ended trading with a fall of 76.42 points and reached a level of 23,062.40 points. The broader S&P 500 wiped out 0.12% of its value to a level of 2,485.74 points, mainly due to declines in the energy sector. The technology index Nasdaq Composite added the minimum 0.08% to its value to 6,584.52 points, but remained well below its highest daily level, with main contributors to growth being Apple, Amazon and Netflix.
For the week, the main indexes rose by at least 2.75%, achieving their first weekly increase in the last four weeks. However, the US markets are moving to their worst December since 1931. S&P 500 wiped out 9.9% of its value for the month, while Dow Jones Industrial Average was down by 9.7%.
The market is getting tired of uncertainty and chaotic communication, which is the main reason for the volatility. It will continue in the new year, as there are still many unresolved issues on the horizon.
The Federal Reserve is bearing the brunt of Trump’s critiques over economic threats as it continues to raise interest rates to more normal levels.
The US and global markets enjoyed lower interest rates over the last decade, being a direct response to the threat of major economic depression in the aftermath of the banking crisis. They formed part of a strategy of quantitative easing (QE) which is now morphing into “normalization” as central banks cease boosting economies to let them operate under their own natural mechanisms.
Higher interest rates combined with trade woes and stock market fluctuations are fueling recession fears. More hikes from the Federal Reserve may cut into Trump’s high hopes for the US economy. Trump believes the Federal Reserve is raising interest rates too quickly
The investors are worried about the Federal Reserve’s monetary policy, the continued paralysis of the federal government in Washington, and the potential signals that the global economy might slow down. Wall Street is also following the events of the trade front against the US and China efforts to reach an agreement on trade.
Recent developments in the markets may lead to the first annual decline of the Dow Jones and S&P 500 since 2015. At the same time, Nasdaq is set to mark its first decline on an annual basis since 2011.
On the corporate front, the shares of Tesla rose by 5.6% after the electric car manufacturer appointed Oracle co-founder Larry Ellison as a member of its board of directors in response to the US regulators’ request for independent company management monitoring.
Meanwhile, Dell Technologies returned to the stock market nearly six years after the founder and CEO of Michael Dell made the company private.
In the bond markets, the yields on 10-year and 30-year US Treasury bonds declined to 2.716% and 3.021%, respectively.
In the forex markets, the dollar index, which measures the value of the US dollar against a basket of six major currencies, declined by 0.12% to a level of 96.35 points. The Euro appreciates by 0.11% against the US dollar to a level of 1.1439 USD. The exchange rate of USD/JPY pair fell by 0.67% to a level of 110.27 JPY.
In the commodity markets, the price of crude oil rose after the weekend volatile trade. The US light crude WTI added 0.72 USD to its value to 45.33 USD per barrel. The international benchmark Brent rose by 0.06 USD to 52.22 USD per barrel.
Gold prices rose by 0.5% to a six-month high of 1,282 USD per ounce.