ASX Declines Following Wall Street Drop; Bitcoin Plummets
The US stock market experienced a notable decline, influenced heavily by Alphabet, Google’s parent company. Concerns regarding AI investments have left investors apprehensive. As a result, major indices reported significant losses, reflecting the market’s overall pessimism.
Market Decline Overview
On Thursday, the S&P 500 fell by 0.9%, marking a potential sixth loss in seven days since its all-time high. Similarly, the Dow Jones dropped 486 points, or 1%. The Nasdaq composite followed suit, declining by 0.9% as well.
Australian Market Impact
The Australian sharemarket is also expected to retreat. Future assessments indicated a drop of 64 points, translating to a decrease of 0.7% at the market’s opening. On Thursday alone, the ASX fell by 0.4%.
Alphabet’s Influence
- Alphabet’s stock fell by 3.2% despite announcing a stronger-than-expected quarterly profit.
- The company anticipates its investment in artificial intelligence technologies could double this year to approximately $180 billion.
Investors remain focused on the potential long-term benefits of these investments, questioning their immediate value in the market.
Job Market Concerns
In addition to stock market woes, discouraging reports from the US job market added to investor anxiety. Applications for unemployment benefits surged unexpectedly last week, indicating potential acceleration in layoffs.
- 108,435 layoffs were announced by US-based employers in January, the highest since October.
- This figure represents the worst January for layoffs since 2009.
Such developments raise concerns that the Federal Reserve might lower interest rates to stimulate economic growth, though this could exacerbate inflation.
Recent Shifts in Treasury Yields
In the bond market, Treasury yields dropped, with the 10-year Treasury yield falling to 4.21% from 4.29% the previous day, following the release of weak job market data.
Plummeting Commodity Prices
In commodities, prices for silver and gold have also weakened. Silver prices fell sharply by 10.4%, while gold decreased by 1.6%, signaling a volatile market situation.
Bitcoin’s Decline
Bitcoin, often referred to as “digital gold,” descended below $68,000 from a record high of over $124,000 in October. This drop negatively affected companies related to cryptocurrency, including a 9.3% decline for Coinbase Global.
Stock Market Reactions
Amid these declines, certain companies showed resilience. Broadcom saw a 3.3% rise, while McKesson surged by 14.8% after exceeding profit expectations.
International Market Performance
Globally, stock markets across Europe and Asia displayed downward trends. The FTSE 100 fell by 0.9%, while France’s CAC 40 and Germany’s DAX dropped by 0.4% and 0.6%, respectively. South Korea’s Kospi experienced a substantial decline of 3.9%, as it fell from its all-time high.
The market continues to react to these ongoing changes, underlining the interconnectedness of global economies amidst rising uncertainties.
