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08 May 2021
3 min read

Markets Weekly Recap

Markets Weekly Recap

*OspreyFX would like to state that traders should research extensively before following any information given hereby. Any assumptions made in this article are provided solely for entertainment purposes and not for traders to guide or alter their positions. Please read our Terms & Conditions and Risk Disclosure for more information.

Key Takeaways

  • Stock indexes diverged, Dow reached new highs, Nasdaq Composite slid
  • Bitcoin remained pinned below $58,000 while altcoins rallied

The financial markets this week brought new and exciting developments on all frontiers. The Dow Jones and the S&P500 climbed to record highs as soon as the first trading day of May. While the 30-stock blue-chip index continued its ascend to higher grounds throughout the week, the broad-market S&P500 index couldn’t keep up and gave up some of the gains as the week progressed.

The Nasdaq Composite slid for most of the week due to increased inflation concerns. The tech-heavy index’s jitters were also fueled by prospects of higher interest rates that could jeopardize the lofty valuations of big tech companies. Google, Microsoft, and Facebook eased off from their record highs, reached last week when the highflying tech sector reported blowout financial results for the first quarter.

On Tuesday, a comment by Treasury Secretary Janet Yellen rattled the stock market and the Nasdaq Composite in particular. In a prerecorded interview with the Atlantic Magazine, Ms. Yellen mentioned that to keep the US economy from overheating, the Federal Reserve would most likely have to raise interest rates

SNL: Dogecoin Spikes Higher

The comment by Ms. Yellen, who served as a Fed chair herself, deviated from the Fed’s current position to keep the interest rate unchanged to allow for the economy to recover, even if this means higher inflation. Later in the day, however, Ms. Yellen appeared in another interview and walked back her comments, saying she is neither recommending nor predicting higher interest rates.

Investors are closely monitoring the Fed’s approach to the economy. The central bank confirmed in its latest meeting that it will keep rates near zero and maintain an ultra-loose monetary policy to facilitate extra-low borrowing costs. In addition, the Fed will continue its current bond purchases program of $120bn worth of assets per month.

On the cryptocurrency front, bitcoin remained largely subdued below the $58,000 mark throughout the week while other cryptocurrencies, or altcoins, rallied to new highs. Ethereum made a new historical top, pushing above $3,360. Dogecoin also reached a new all-time high, spiking to $0.69 ahead of the expected skit by Elon Musk on the Saturday Night Live show this weekend.

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