Investors react as gold tumbles and equities slide, with earnings and policy shifts driving volatility
Gold’s stunning rally faltered with its sharpest single-day drop in over five years, as US equities also lost ground amid renewed trade tensions and disappointing corporate earnings, according to BNN Bloomberg.
The S&P 500 fell 0.5 percent to 6,699.40, while the Dow Jones Industrial Average dropped 334 points, or 0.7 percent, to 46,590.41, and the Nasdaq Composite declined 0.9 percent to 22,740.40, as reported by BNN Bloomberg.
The pullback followed a record-setting session for the Dow and left the S&P 500 still within one percent of its all-time high.
Gold, which had been one of the year’s best-performing assets, slid 5.3 percent on Tuesday and another 1.1 percent on Wednesday, settling at US$4,065.40 per ounce.
Reuters noted that the decline came as investors booked profits, though gold remains up more than 50 percent for the year and is on track for its strongest performance since the 1979 oil crisis.
Analysts at ANZ Group Holdings suggested that “positioning had built to substantial levels and ultimately triggered the selloff,” but maintained that long-term drivers for gold remain intact.
The equity market’s decline was amplified by disappointing results from high-profile companies.
Netflix shares tumbled 10.1 percent after reporting weaker-than-expected profits, while Texas Instruments dropped 5.6 percent on a soft earnings outlook, according to CNBC.
The broader semiconductor sector also came under pressure, with On Semiconductor and Advanced Micro Devices falling sharply.
Trade policy developments added to the market’s cautious tione.
CNBC reported that the White House is considering restrictions on exports to China involving US software, following US President Donald Trump’s announcement of upcoming export curbs on “any and all critical software.”
Reuters further detailed that the move is seen as a response to Beijing’s rare earth export restrictions.
Despite the volatility, some companies outperformed. Intuitive Surgical surged nearly 14 percent after reporting strong earnings, while Boston Scientific and Western Alliance Bancorp also posted better-than-expected results, as noted by BNN Bloomberg.
Meanwhile, Beyond Meat experienced wild swings, surging as much as 112 percent before closing down 1.1 percent, but remains up over 450 percent for the week amid a meme-stock rally.
In the bond market, US Treasury yields declined for a third consecutive session, with the 10-year yield easing to 3.95 percent.
The Federal Reserve is expected to cut rates further this year, though the ongoing government shutdown has created a dearth of economic data for policymakers, according to Reuters.
London’s FTSE 100 bucked the global trend, rising 0.9 percent after UK inflation data raised expectations for a Bank of England rate cut, as reported by BNN Bloomberg.
Oil prices also ended higher, with US crude settling at US$58.50 a barrel.
As volatility persists, analysts suggest that market pullbacks are “healthy and necessary,” with many investors viewing corrections as opportunities to add risk, according to Bloomberg.
