The American stock markets closed slightly down on Thursday, weighed down by geopolitical concerns and the Federal Reserve’s interest rate decision. Investors digested the Fed’s unchanged interest rate decision, which received a lukewarm reception, with central banks such as the Bank of England, the Swedish Riksbank, and the European Central Bank expressing caution about economic developments. The market is now awaiting April 2nd when Trump’s new tariffs against the EU are expected to take effect, which could lead to further tensions between the US and its global trading partners. Consequently, Deutsche Bank warned yesterday that increased uncertainty surrounding trade policy could impact US GDP growth and global growth. On the macro front, new data showed that the number of new jobless claims did not increase significantly in the previous month, indicating a continued strong labor market despite economic uncertainties. The broad S&P 500 index closed down 0.2 percent, while the tech-heavy Nasdaq composite index fell 0.3 percent and the Dow Jones Industrial Average traded sideways.
Commodities traded overall lower, with oil moving against the trend upwards after the US imposed new sanctions on Iran. The sanctions target Chinese independent refineries that are significant buyers of Iranian oil. Meanwhile, OPEC+ announced a new schedule for production cuts in seven member countries, including Russia, Kazakhstan, and Iraq, to offset previous overproduction. Despite the uptick, movement was limited by a stronger dollar and unexpectedly large inventory build-ups in the US, where crude oil inventories increased by 1.7 million barrels, more than expected. WTI crude oil rose $0.9 to $68.1 per barrel, while Brent crude climbed $1.4 to $72.1 per barrel.
Base metals traded lower yesterday, with lead being the biggest loser, down 1.9 percent, followed by nickel and copper, which decreased by 1.2 and 0.9 percent, respectively. Zinc declined by 0.3 percent, and aluminum by 0.6 percent, while tin traded up 1.4 percent. Gold, which reached a new record high for the third consecutive session, edged lower yesterday as investors took profits after recent strong gains. However, the long-term trend remained positive due to uncertainty surrounding the global economy, ongoing geopolitical risks, and market expectations of further Fed interest rate cuts this year. Citi predicts that the price of gold could reach $3,500 per ounce by the end of the year, especially if the US economy continues towards a hard landing or even stagflation, according to Reuters. Gold fell $1.1 to $3,045.6 per ounce.
Among US-listed companies, consulting giant Accenture plummeted 7.3 percent after reporting weaker-than-expected quarterly results. Meanwhile, Temu owner PDD Holdings rose 4.0 percent despite its worse-than-expected quarterly report. Nvidia increased by 0.8 percent following this week’s tech conference, while sector peers IonQ and Quantum Computing declined by 9.2 and 11.7 percent, respectively. Furthermore, among the “fabulous 7,” Apple traded down 0.5 percent, and Google parent Alphabet dropped 0.7 percent.
The US ten-year Treasury bond fell by 1 basis point to 4.24 percent.
Asian markets started the final trading day of the week with declines, pressured by concerns about upcoming tariffs, particularly evident in Hong Kong’s technology sector. In Japan, where the market was closed on Thursday due to the vernal equinox, Mitsubishi Motors surged over 4 percent following reports of a collaboration agreement with Taiwanese Foxconn for electric vehicles. On the macro front, Japan’s core CPI, excluding fresh food, stood at 3.0 percent year-on-year in February, down from 3.2 percent in January and slightly higher than the expected 2.9 percent. The total CPI rose 3.7 percent compared to 4.0 percent the previous month, while CPI excluding both fresh food and energy reached 2.6 percent, up from 2.5 percent in January. At 07:45, the Chinese Shanghai Composite index was down 1.2 percent, while the Japanese Nikkei 225 index declined by 0.2 percent. The Hang Seng index fell by 2.1 percent.
On the Stockholm Stock Exchange, it remains quiet on the earnings front on Friday. Among the morning’s fresh recommendations, Handelsbanken upgraded its long-term recommendation for Vitrolife to market perform from underperform but lowered the target price to 230 SEK (from 255). JP Morgan raised its recommendation for Tele2 to overweight from neutral with a target price of 156 SEK, while Carnegie downgraded its recommendation for Yubico to hold from buy with a target price of 270 SEK (from 300). Additionally, RBC lowered the target price for Atlas Copco to 140 SEK (from 150) and reiterated underperform, raised the target price for Sandvik to 270 SEK (from 250) and reiterated outperform. Jefferies cut the target price for Essity to 279 SEK (from 284) and reiterated hold, while SEB raised the target price for OEM to 160 SEK (from 146) and reiterated buy. Finally, Pareto Securities lowered the target price for Sedana Medical to 20 SEK (from 25), maintaining a buy recommendation, and downgraded Lime from buy to hold with a target price of 400 SEK (from 410).
On the macro front, Friday will be a quiet day starting with Japan’s consumer price index, which landed at 3.0 percent year-on-year in February, followed by the Eurozone’s trade balance at 09:00. The day continues in the US at 18:00 with Baker Hughes’ total rig count, the third and final event of the day.