Nasdaq Down Over 2% Amid Tech Selloff, Oil Jumps to a 7-Year High
*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
- Nasdaq slides more than 2% on Monday as Facebook, Alphabet lead the losses
- Oil trades at a 7-year high as OPEC chooses not to boost oil output
Whatâs on Focus in the Markets?
Nasdaq, the technology-heavy index, slipped more than 2% on the first trading day of the week. The selloff was inspired by big-tech names such as Google parent Alphabet, Microsoft, Amazon, Netflix, and Apple.
Furthermore, all these shed 2.5% or more apiece. Adding to the mounting losses, Facebook was the leading decliner, down about 5% on the day. The social media giant was hit particularly because Facebook entities WhatsApp, Instagram, and Facebook were not accessible to users Monday.
In the meantime, brent oil, the international benchmark, hit a seven-year high of $81.97 per barrel. In more detail, the sharp rise followed after OPEC and a Russia-led group failed to reach an agreement over boosting the oil supply.
In contrast, the oil-producing countries agreed to continue increasing production at their regular pace. The decision came amid pressure from the White House as lawmakers urged OPEC and its allies to tackle a growing global energy shortage.
Whatâs the Price of Bitcoin?
Bitcoinâs recent strong gains extended for another day on Monday and early Tuesday. In other words, the leading cryptocurrency added another roughly 2% to its price. Bitcoin climbed to an intraday high of nearly $49,715 per coin today.
Gold prices rose for a third-straight day yesterday. The yellow metal reached a session high of $1,770 per ounce amid decreased appetite for stocks or other riskier assets.
Currencies, as one of the most liquid markets, traded mixed. The US dollar, which has recently been on a tear, gave up some recent gains against the euro. To be precise, the EUR/USD gained about 30 pips yesterday, finishing the session at levels near 1.1625.
In addition, the EUR/CAD found some support at a two-month low of 1.4600. The euro bounced from the level as bulls were quick to buy the dip.
Whatâs New?
Investor nervousness in the financial markets has increased jitters across various asset classes. That being said, the strengthening of the US dollar in recent months has been another reason for concern. The greenback has been rising steadily against other major currencies since June. Over that period, its value has gained about 5%. And that is now beginning to trouble money managers.
A strong US dollar has the potential to threaten the high valuations of stocks and other risky investments in the markets. Some companies, in particular those in the technology sector, generate as much as half of their revenue from outside the US. Generally, when the dollar becomes more expensive, relative to other currencies, the value of foreign profits shrinks.
Whatâs Next?
The US non-farm payrolls report for September is slated for Friday. On that note, the Federal Reserve said it has seen enough progress in the economy to consider unwinding monetary support. That would mean the US central bank will be watching the jobs numbers to see where the economy is headed.
In other news, this week is the last one before the earnings seasons for the third quarter kick in. US financials such as Goldman Sachs and JPMorgan will be the first to reveal their quarterly results next week.
Todayâs Economic Calendar (EST times)
04:30 am, UK, Composite PMI (Sep)
04:30 am, UK, Services PMI (Sep)
11:00 am, EU, ECB President Lagarde Speaks
09:00 pm, NZD, RBNZ Interest Rate Decision
09:00 pm, NZD, RBNZ Rate Statement
Subscribe to our newsletter to receive our weekly updates + more straight to your inbox!