Stocks retreat from record highs as caution persists
Global stocks retreated from record highs as traders turned to profit-taking in an environment of caution and uncertainty, amid mixed global stock indexes and the postponement of important U.S. economic data.
Major Markets Performance
The S&P 500 and Nasdaq indices posted slight gains overnight, but futures fell sharply, and the European Stoxx 50 futures declined, signaling that markets are correcting some of the recent gains.
Factors pressuring markets
- Lack of economic data
The US government shutdown has put most US economic data on hold, including the Federal Reserve's closely watched job openings data (JOLTS), which was due out today.
Investors will have to wait until Wednesday for the ADP jobs report as a proxy indicator.
- Divergent central bank policies
Investors continue to follow divergent statements from Federal Reserve officials about the right path for monetary policy, adding to the uncertainty in the market.
Traders currently seem content to scale back their expectations for a December rate cut, pushing the dollar to multi-month highs against the yen and the euro.
- Tech Sector Concerns
Although tech news supported Wall Street on Monday, it simultaneously reinforced lingering concerns about how closed the loop on the companies that are fueling the great enthusiasm around artificial intelligence is.
Worrisome developments
Former US President Donald Trump's recent remarks about Nvidia's high-end chips have raised doubts in the market, as he stated that these chips will not be available outside the US, and the restrictions are not limited to China only, portending an escalation of trade and technological tensions.
Today's highlights
Investors are looking forward to earnings reports from several major companies, including AMD, Uber, Spotify, Pfizer, and Supermicro Computer.
ECB President Christine Lagarde's speech in Sofia, Bulgaria, could provide important clues about the direction of monetary policy in the European region.
