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The market slips lower as focus shifts to incoming data

The US dollar finally rebounded, edging higher as a retreat in technologies pull the market lower.

A bad day to be in tech

The S&P 500 dropped on Wednesday under pressure from the technology sector as data showing a slowdown in the job market and weakness in services activity fuelled worries about the economy. This is right at a time when Fed officials are hyping the possibility of further rate increases.

The Nasdaq declined 1.2%, while the S&P 500 dropped 0.3%. The Dow Jones was the only index closing in the green with a 0.21% rise. As risk mood was soured by monthly private payrolls in March and US services data fell short of forecasts, a stumble in Apple, Amazon, and Meta sent the wider market lower, igniting new recession worries.

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Private payroll growth slowed significantly in March to 145,000 from 261,000 in February according to Moody’s. That fell far shy of the 200,000 analysts had predicted. The services ISM dropped from 55.1 in February to 51.2 in March, falling short of the average estimate of 54.5.

The chip industry suffered as well, with NVIDIA dropping more than 2% on concerns about increased competition, in form of Alphabet’s disclosure of its artificial intelligence chips. Google claimed these were faster and less power-hungry than those of competitors.

The US dollar finally gets into the green

On Wednesday, the US dollar made a comeback. Although the early response to the unimpressive macroeconomic data releases from the US sent the US dollar Index edging lower, it had no trouble changing its position.

The major Wall Street indexes helped the US dollar gain favour as a safe haven currency. Investors are waiting for the non-farm payroll data for March, which is due out on Friday. Economists anticipate 240,000 new positions.

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The dollar index increased by 0.4% to 101.87 in afternoon trading, driven by advances against the euro, which decreased by 0.5% to 1.0906. The dollar suffered its third daily loss against the yen in other currency markets, dropping 0.4% to 131.15.

DXY

US dollar index 1D chart, source: tradingview.com

The US dollar’s exchange rate to the Swiss franc was unchanged at 0.9060. After 10 consecutive rate hikes, the Australian dollar fell 0.5% against the US dollar to 0.6720 the day after its central bank held rates steady at 3.6%, stating that it required more time to evaluate the effects of previous increases.

The crude remains lifeless before the next big data

After the OPEC+ statement on production cutbacks, crude prices battled once more to maintain their strong weekly opening rally. A US weekly inventory report on Wednesday revealed that the government had once more lowered reserves to boost the market supply and prevent gasoline price increases.

WTI fell 10 cents, or 0.1%, to $80.61 per barrel, however, still above the crucial $80. Just 0.4% was added to WTI during the previous session. On the back of OPEC+’s plans to cut oil production by an additional 1.7 million barrels per day, the US crude standard has failed to rise since Monday’s 6.3% gain.

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After increasing by just a penny on Tuesday, Brent oil ended the day up 5 cents, or 0.1%. Brent had increased 6.3% on Monday, similar to WTI.

The yellow metal’s June contract finally retreated today to close in the red. Gold closed at $2,037.9, which is only 0.02% lower. Silver futures closed without a change at $25.102.

Tomáš is a financial reporter with US markets as his main field. Tomáš is an aspiring author and entrepreneur aspiring to help people get better in financial knowledge.

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