Wall Street declines, NASDAQ slumps 3.7%
US stock indices declined on Tuesday amid a selloff in the tech sector, leading to overall decline.
NASDAQ was severely dragged down by the tumble in Snap, Alphabet, and other companies.
Latest data showed the manufacturing PMI fell to 57.5 from 59.2 in the previous reading, while services PMI declined to 53.5 from 55.6.
Dow Jones fell 1.2% to 31,506 as of 14:16 GMT, while S&P 500 shed 2.2% to 3,885, as NASDAQ added 3.7% to 11,102.
Is dollar heading firmly lower?
Dollar declined on Tuesday to one-month lows against major rivals amid a selloff away from 20-year highs.
Is the dollar heading for truly bearish territory? we try to answer this in this report.
The Index
The dollar index fell 0.35% on Tuesday to 101.74, the lowest since April 26, after hitting 105 on May 13, a 20-year peak before tumbling on profit-taking.
Bearish Market
In order to firmly enter bearish territory, the dollar has to fall below 100, which is yet to happen.
So far it's a mild correction to collect profits on the large buy positions in the last few weeks.
Chinese Economy
China is starting to loosen up restrictions on movements in major cities as Covid 19 infections decline, while China's central bank took a bold move and cut interest rates to bolster economic activities.
Shanghai, a 25 million people city, is preparing to return to normal life by June 1.
Otherwise, the People's Bank of China cut five-year interest rates for loans by 15 basis points to 4.45%, the largest such decrease since 2019.
Bonds
US 10-year treasury yields tumbled to three-week lows at 2.774%, hurting dollar's standing, after negative reports by major US retailers.
Analysts are now genuinely concerned about a potential US economic recession as the Fed forges ahead in hiking interest rates in very rapid paces.
US output already slowed down by 1.4% in the first quarter, with deeper declines feared in the future.
Gold edges near two-week high as dollar slips
Gold prices climbed on Tuesday for the fifth session in a row, about to hit two-week highs as the dollar declines against major rivals.
Gold prices rose 0.4% to $1,860 an ounce, after rising 0.4% yesterday, the fourth profit in a row, marking two-week highs at $1,865.
The Dollar
The dollar index fell 0.35% on Tuesday for another session, marking month lows at 101.74 against major rivals.
Losses in dollar underpins gold prices, with risk appetite improving worldwide and hurting dollar demand.
Risk appetite improved as China loosens up restrictions as Covid 19 infections decline, while investors have completely priced in future US rate hikes with the dollar.
Safe Havens
Global markets continue their recovery, led by Wall Street, as risk appetite improves markedly amid hopes for recovery in China.
SPDR
Gold holdings at the SPDR Gold Trust rose 4.64 tones yesterday for the third day to a total of 1,068 tones, a May 10 high.