Tech sector collapse
US stock indexes S&P 500 and Nasdaq ended trading on Thursday with significant declines. The main culprit of the decline was Nvidia, a leading chip maker, whose shares collapsed after the publication of the financial report. Investors who expected the artificial intelligence (AI) sector to continue its rapid growth were disappointed. At the same time, new macroeconomic data points to a slowdown in the US economy, increasing market concerns.
Nvidia Slips
Nvidia (NVDA.O) shares plunged 8.5%, wiping out $274 billion in market capitalization after a weaker-than-expected quarterly gross profit forecast. Even the upbeat revenue forecast failed to offset pessimistic investor expectations, adding to the pressure on the entire tech sector.
Viral Crash: Chip Sector Under Attack
Nvidia's slump has caused a chain reaction among other semiconductor makers. Broadcom (AVGO.O) shares fell more than 7%, while Advanced Micro Devices (AMD.O) shares lost 5%. As a result, the Philadelphia Semiconductor Index (.SOX) fell 6.1%, one of its biggest declines in recent memory.
Trump's Trade Policy Creates New Risks
The stock market is also closely monitoring the escalation of trade barriers. Former President Donald Trump announced a 25% tariff on European cars and a range of other goods. He also said tariffs would go into effect on Mexico and Canada on Tuesday.
These moves could escalate trade tensions and lead to retaliatory moves from other countries, adding to pressure on markets.
Awaiting Key Inflation Data
Investors now turn their attention to the upcoming release of the Personal Consumer Expenditure (PCE) index, a key inflation measure that the Federal Reserve uses to decide rates.
The data, due out on Friday, is expected to provide a clearer picture of the Fed's next move. The market is expected to price in at least a 50 basis point rate cut by December.
Salesforce Disappoints
Salesforce (CRM.N) dealt an additional blow to the tech sector. The business software company issued a revenue forecast for the 2026 fiscal year, which was below analysts' expectations.
Against this backdrop, Salesforce shares fell by 4%, exacerbating the overall decline in the tech sector.
Financial giants on a swing: Snowflake and Warner Bros grow, Viatris in crisis
The market remains unstable, and volatility affects even the largest players. While some companies demonstrate strong growth, others are losing investor confidence.
Snowflake (SNOW.N) confidently went up, adding 4.5%. The data analytics provider issued an optimistic revenue forecast for the 2026 fiscal year, exceeding analysts' expectations. This caused a wave of positive sentiment among investors and strengthened the company's position in the cloud technology sector.
Viatris (VTRS.O), on the other hand, collapsed by 15%. The drugmaker presented a disappointing forecast for the year, which caused a sharp negative reaction from the market. Investors are concerned about the slowdown in the pharmaceutical sector and the deterioration of the company's financial performance.
Warner Bros Discovery (WBD.O) added 4.8%. The company said it expects streaming revenue to double this year, which spurred demand for its shares. This forecast instills confidence in the further development of the digital entertainment industry, despite the general problems of the media industry.
Europe under pressure: new US tariffs hit markets
European financial markets felt the effect of the threat of 25% tariffs from the United States. Yesterday, European stock markets recorded a decline, and futures signal the possibility of further losses.
In addition, the euro fell to a two-week low against the dollar, which indicates growing concerns among investors. The protectionist policy pursued by the United States threatens the export prospects of European manufacturers, which is inevitably reflected in quotes.
Canadian dollar slips as Trump refuses to back down
The Canadian currency continues to slide, hitting a new 3.5-week low. Investors see little cause for optimism as Donald Trump confirmed that 25% tariffs on Canada and Mexico will go into effect next week.
It was previously thought that the deadline could be delayed by a month, but it has now become clear that there will be no delay. This adds to the pressure on the Canadian economy, as the country's dependence on trade with the US remains high.
China in a difficult situation: the market awaits the reaction of the authorities
The reaction of Chinese markets to the threat of an additional 10% tariff from the US has been mixed. The main problem is the uncertainty of the timing. Next week, China's National People's Congress will meet, and analysts believe that the authorities will be forced to announce new economic stimulus measures.
The focus remains on the Chinese yuan. Despite the turbulence, the People's Bank of China has taken steps to stabilize the currency by setting a tighter official exchange rate. This shows the authorities' desire to support the yuan and prevent sharp fluctuations.
Australian and New Zealand dollars under pressure
Markets traditionally view the Australian and New Zealand dollars as more liquid substitutes for the Chinese yuan. Therefore, threats of new tariffs against China have immediately affected these currencies.
Both currencies have come under significant pressure, while the yuan itself is showing signs of recovery after weeks of decline. The People's Bank of China is actively adjusting the situation, trying to maintain financial stability in the country ahead of key policy decisions.
Asian markets in the red: pressure mounts
Asian stock markets ended the week on a negative note, reflecting growing concerns about the global economy. Hong Kong's Hang Seng Index (.HSI) fell 1.7%, while Chinese blue chips (.CSI300) lost a relatively modest 0.5%.
However, the biggest declines were seen in Japan's Nikkei (.N225) and South Korea's Kospi (.KS11), which fell almost 3%. Pressure on markets is increasing, and investors are looking for safe assets, which is causing the Japanese yen to strengthen.
Japanese yen strengthens: a safe haven in action
Amid market volatility, the yen was the only currency to show significant gains against the dollar on Friday. This dynamic is traditional: investors view the Japanese currency as a safe haven asset in times of turbulence.
Additionally, the rate was affected by falling US Treasury yields, which reached new two-week lows. This reflects traders' concerns that a potential trade war could hit not only the global economy, but also America itself, which is already showing signs of slowing down.
Key US inflation indicator to be released today
Investors are focused on the release of the PCE deflator, a key inflation indicator tracked by the Federal Reserve, today. This data will help assess the likelihood of future changes in US monetary policy.
The market is increasingly betting that the Fed will stick to a soft monetary policy. It is now almost certain that two rate cuts of 0.25% will take place in June and September.
The European Central Bank is preparing to cut rates
The first to enter the world arena will be European regulators: next week, the European Central Bank (ECB) will hold a meeting where it is expected to announce a rate cut of 0.25%.
However, the further strategy remains unclear. Some ECB officials hint that the pace of easing may slow down depending on the macroeconomic situation. This creates uncertainty for markets and adds volatility to the forecasts for exchange rates.
Investors await signals, but the market remains under pressure
Financial markets around the world are showing increased nervousness. The threat of trade wars, macroeconomic uncertainty and upcoming central bank decisions make the market extremely sensitive to any news.
Key events that will determine further dynamics:
- European Central Bank meeting;
- Reaction of world currencies to regulators' actions.
The market may face sharp movements in the coming days, and investors remain waiting for new signals that will help shape a strategy for the near future.
Cryptocurrencies Under Attack: Bitcoin Loses Ground
A new wave of sell-offs is underway in the digital asset market. Bitcoin (BTC) briefly dipped below the key $80,000 level, demonstrating a 27% drop from its all-time high of $109,071.86 on January 20.
The sharp decline in the rate is due to several factors:
- A general decrease in risk appetite amid market instability;
- A strengthening US dollar, which traditionally puts pressure on crypto assets;
- Technical corrections after the rapid growth of recent months.
As investors assess the prospects for further movement, the crypto market remains extremely volatile.
Trump Focuses on Trade and Immigration, but the Crypto World Reacts in Its Own Way
Since returning to the White House, Donald Trump has focused on international trade issues and tightening immigration policies. However, his influence has unexpectedly extended to the crypto market.
Recently, meme coins associated with Trump and his family have gained particular popularity. The most attention has been attracted by the $Trump and $Melania tokens, which have caused a surge in speculation among investors.
Although these assets have no fundamental value, their volatility and popularity in the trading community demonstrate how closely the crypto market is intertwined with political events.
Financial markets await new benchmarks
The current situation shows that global markets are going through a period of high uncertainty:
- The technology sector is under pressure due to the emergence of new competitors;
- The cryptocurrency market is facing sharp corrections;
- Global markets are waiting for new decisions in the field of monetary policy.
Investors remain tense, waiting for new drivers that will determine the direction of capital flows in the coming weeks.
