The shaky risk sentiment in the markets forced US equities to decline in recent trading, a sign that global stock markets might be ready to resume their selloff sooner or later. The conflict in Ukraine is still present while authorities are still investigating the missing Malaysia Airlines plane’s disappearance, lending more uncertainty in the forex market.
In the New York trading session, the S&P 500 ended the day lower by 9.55 points and marked a 0.51% loss. The Dow Jones Industrial Average (DJIA) chalked up a 0.41% loss of 67.3 points while the Nasdaq Composite index marked a 0.63% decline for the trading day.
The lack of major reports from the US economy was one factor in the equities selloff. Apart from the non-farm payrolls release last Friday, there have been no top-tier catalysts for the US dollar and US stock market for the past few trading days, leaving equities to trade mostly on market sentiment.
Global Stock Markets Outlook
With that, today’s trading sessions might mark another losing day for global stock markets as risk appetite is starting to wane. Downbeat comments from BOE officials, who pointed out that the tightening cycle isn’t bound to start anytime soon and that further GBP rallies might hurt the economy, led to weakness for most European stocks.
Equity analysts are also calling the shots on a longer-term reversal for stock market gains. After all, the stock market has been very volatile recently, chalking up significant gains on any improvement in risk sentiment while marking consecutive losses when the upbeat effects fade.
Another reason is the ongoing slowdown in the economy. While the recent NFP showed a pick up in employment change, underlying labor components still point at prevailing weaknesses. For one, the participation rate hasn’t been improving much as it held steady at 63% based on the past jobs report. Unless recent global conflicts reach a resolution soon, traders don’t foresee strong and sustained gains for stock markets worldwide.
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