Wall Street was hit hard on Monday morning as major U.S. stock indexes fell further on top of losses accumulated last week. Reports suggest that investors are concerned about an upcoming Fed rate hike and the recent Covid-19 outbreak in China. Gold fell 1.6% against the U.S. dollar over the past 24 hours as stocks struggled on Monday and the crypto-economy fell below the $2 trillion mark. However, after Elon Musk revealed that he acquired Twitter at 2:50 p.m. ET, the stock and cryptocurrency markets rallied sharply after the announcement.
Global markets shaken by concerns over Covid-19-related supply chain issues and possibility of sharp interest rate hikes
Four days ago, current Fed Chairman Jerome Powell explained at an International Monetary Fund (IMF) panel discussion on April 21 that the Fed may have to act “faster” when it comes to raising interest rates . Powell further noted that the Fed may raise rates by 50 basis points at the next Fed meeting. Powell’s hawkish comments spooked investors, with U.S. stock indexes falling ahead of the start of last week’s weekend.
Wall Street continued to suffer losses on Monday as the Dow Jones Industrial Average, NYSE Composite and S&P 500 all fell. At 10 a.m. ET, the Dow was down 415.23 points, and by afternoon it had recovered slightly more than half of its losses. The impending Fed rate hike and China’s Covid-19 lockdown are currently to blame. The current lockdown in China has raised concerns about possible supply chain problems, Christopher Grisanti, chief equity strategist at MAI Capital Management, told Reuters.
“The lockdown in China is getting worse. It has slowed overall economic growth and created supply chain issues that will continue to worsen inflation and reduce U.S. income growth,” Grisanti said. “I don’t think we’ve seen a bottom yet. We haven’t seen that much of a sell-off when we have a lot of volume,” the strategist added.
Gold and crypto markets hit hard, portfolio manager says ‘the market is struggling’
Gold and cryptocurrencies have also seen a downtrend recently. The crypto economy has lost billions of dollars last week, falling back below $2 trillion. Some of the top 10 digital assets have lost between 2% and 10% over the past seven days. In addition, the price of an ounce of pure gold has fallen by a certain percentage over the past 24 hours.
An ounce of pure gold has lost 1.6% in the past day, and an ounce of pure silver has lost 2.04%. Gold prices have also been stagnant for the past 30 days, with one-month statistics showing a slight gain of 0.39% in the dollar value of an ounce of gold. Silver, on the other hand, has lost more than 3% over the past 30 days. The precious metal’s fall in value has also been blamed on the Covid-19 outbreak in China, while current U.S. Treasury yields are likely to attract gold investors.
Investors are battling “very powerful forces,” Steven Violin, a portfolio manager at FLPutnam Investment Management Co., told Marketwatch on April 23. Violin said it is likely that no one can predict what will happen to the economy. “The tremendous economic momentum recovering from the pandemic is being accompanied by a rapid shift in monetary policy,” Willing said. “Like us, the market is trying to understand how this is going to play out. I’m not sure anyone really knows the answer.”
U.S. stocks and cryptocurrencies recover day’s losses after Musk buys Twitter
Despite the stock market downturn and recent losses in the crypto economy, both stocks and crypto prices rebounded after Twitter announced that Tesla’s Elon Musk had acquired Twitter. Following the announcement, the entire crypto economy jumped from $1.93 trillion to $1.96 trillion. After falling below the $40,000 mark, BTC once again jumped back above the $40,000 region.
I wish even my worst critics would stay on twitter because that’s what free speech is all about
— Elon Musk (@elonmusk) April 25, 2022
Major U.S. stock indexes recovered from early losses, with the NYSE, Dow, S&P 500 and Nasdaq recovering most of the day’s losses. The major indexes turned from red to green as the Wall Street session neared the close. After the company was acquired by Musk, Twitter’s current CEO, Parag Agrawal, said: “The purpose and relevance of Twitter impacts the world. Proud of our team and inspired by more important work than ever before.” Equity Investors and Crypto market participants seem to like the fact that Musk bought the social media company.
How do you see the global market today? Do you think the market will continue to slide, or do you think there will be a near-term rebound? Let us know what you think about this topic and the economy in the comments section below.
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