Global financial markets experienced sharp changes this week. Despite temporary relief from the U.S.-China truce, rising bond yields and credit rating concerns pushed investors into a more defensive stance.
Equities Overview
This week, the S&P 500 declined by 2.6%, closing at 5,804.31, marking its worst weekly performance in seven weeks. The Dow Jones Industrial Average fell by 2.5% and the Nasdaq Composite dropped by 3%. The Russell 2000 index, representing small companies, decreased by 3.5% amid escalating trade tensions.
However, some small companies, such as Honasa, showed significant gains after strong quarterly results.
Commodities Dynamics
Oil prices remained relatively stable, with WTI crude closing at $61.76 per barrel. Market participants are closely monitoring OPEC+ discussions concerning a potential increase in production of 411,000 barrels per day in July.
Gold experienced volatility, trading at $3,234.58 per ounce, attracting investors seeking a hedge against economic uncertainties.
Currency Market Prospects
The U.S. Dollar Index (DXY) rose by 0.8% for the week, marking its best performance since February, as investors sought safe-haven assets. The euro and British pound exhibited minor fluctuations against the dollar. The Japanese yen and Indian rupee also experienced slight changes amid varying economic data.
Looking across asset classes, the market is clearly searching for direction. Equities recoiled under pressure from rising yields and fiscal concerns, while interest in alternative assets among investors is growing.
