NASDAQ and S&P500 Down After the US Retail Data

The opening bell on Wall Street and other Asian markets today sounded not so good to investors all around the world. Globally, the markets are showing negative sentiment. 

The Nasdaq was down 59 basis points while the S&P 500 was holding hands together at 56 basis points. Excluding Japan’s Nikkei, all the Asian and European markets showed somewhat similar sentiments. Along with that, the Volatility Index (VIX) was 6% up, showing the increasing fear in the market. 

Looks like the Christmas party is over on Wall Street after the NASDAQ, Russell 2000, and S&P 500 all traded at the sky limit. The retail sales data came during the sunny day and brought stormy clouds alongside. 

What is the Reason for the Fall?

What is causing the fall in the markets, the reason is the FED’s comments and regular strong market data but there are other underlooked aspects. 

The story goes back to the judgment day of December when the Federal Reserve stopped raising interest rates. Since the interest rates of the government and the capital market growth have an inverse relation, The NASDAQ and S&P 500 started rising, and suddenly the fear in the I market was nowhere to be seen. 

However, the FED was constantly giving signals for an “overwhelmed” sentiment, the investors were confident about a rate cut. However, as the data from the market was coming strong, the hope for a rate cut in the first quarter of 2024 was fading. In December, retail sales rose from 0.3% to 0.6%, meanwhile, the predictions were just for 0.4%. 

Two-thirds of the US economy depends upon consumer spending and retail sales highlight economic strength. The FED governor Christopher Waller also gave a speech in which he concluded with his view of a strong economy with controlled inflation. He also gave signals about how there is not an immediate need for a rate cut in the country.

Following this news, the bond market in the US was strengthened with the yields rising above 4.1%. The Indian market was also filled with red colors after a huge pullback of Foreign Institutional Investors (FIIs).

The NIFTY 50 along with the NIFTY BANK showed a strong bearish sentiment upon the opening bell in the Dalal Street. Overall, investors around the world are getting more conservative with their partitions of investments.

Conclusion

Markets around the world are looking strong. US mega caps like NASDAQ and S&P 500 showed a drop of two-digit basis points. The retracement was a result of strong retail sales data which caused the expectations of the rate cuts to fall short. Asian and European markets also showed a pull-back.

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos or related indexes comes with a risk of financial loss.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages ​​and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.