[Chart courtesy of MarketWatch.com]

1. Moving the markets

The S&P 500 index continued its downward trajectory, extending its losing streak to five consecutive days. Wall Street witnessed a seesaw battle between optimism and caution, resulting in a lackluster recovery attempt. Meanwhile, the Nasdaq faced headwinds, struggling with a 3% decline this week, marking its longest negative streak since December 2022.

Amidst this volatility, more than 12% of S&P 500-listed companies have reported earnings, showing promise for a positive season. Notably, 73% of these companies have exceeded Wall Street expectations. However, the second quarter has proven challenging due to mounting concerns about inflation and the Federal Reserve’s monetary policy.

As April unfolds, all three major indexes remain in the red, a stark contrast to the robust performance seen in the first quarter.

Bond yields surged, impacting equities, while Bitcoin and gold exhibit contrasting trends. The critical question remains:

Who will emerge victorious in this battle between rate hike expectations and the Nasdaq?

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[Chart courtesy of MarketWatch.com]

1. Moving the markets

The S&P 500 extended its losing streak, dropping for a fourth consecutive session. Struggling technology stocks, including Nvidia, exerted downward pressure on the market. Interestingly, this is the third straight session where stocks opened higher but then faded throughout the day.

Early in the trading day, stocks were sliding after the opening. However, around 10:55 AM ET, a headline about STRIKING IRAN’S NUCLEAR FACILITIES caught investors’ attention and led to an aggressive decline in stock prices.

Despite the recent volatility, the earnings season has kicked off on a promising note. While less than 10% of S&P 500-listed companies have reported financial results so far, more than three out of every four have exceeded Wall Street expectations.

The Dow managed to break its six-day losing streak thanks to UnitedHealth’s post-earnings rally. However, both the S&P 500 and the Nasdaq Composite experienced three consecutive days of declines.

On Tuesday, Federal Reserve Chair Jerome Powell emphasized that the central bank needs to see further progress on the inflation front before considering rate cuts. Meanwhile, the U.S. 2-year Treasury yield remained relatively stable after briefly crossing the 5% mark following Powell’s remarks.

In the commodities market, crude oil initially drifted lower due to a larger stockpile build, but then Venezuela’s Maduro and SPR headlines caused a sharp price drop to three-week lows. Gold also tumbled, resulting in a losing session.

The trading session took an unexpected turn at 2 PM ET, with stocks going vertical for no apparent reason, only to reverse just as quickly—an almost perfect repeat of the previous day’s pattern.

Bond yields finally fell, providing some relief to bond holders. The 2-year yield rejected the 5% level, and rate-cut expectations remained unchanged. Additionally, the U.S. dollar declined for the first time in six days, while Bitcoin found support around the $60,000 level.

So far, the S&P’s historical 2^nd half April performance has not come into play yet:

Can history override current market realities?

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[Chart courtesy of MarketWatch.com]

1. Moving the markets

Despite a promising start with strong earnings from Goldman Sachs and encouraging retail data, the major indexes took a downturn, erasing the gains from the morning rally. The conflict in the Middle East remains a concern, but there is hope it won’t escalate further. Small Caps and the Mag7 stocks experienced a significant drop, reminiscent of the downturn two weeks prior.

On Wall Street, a surge in retail sales by 0.7% in March—exceeding the expected 0.3%—signaled continued consumer strength despite the pressures of inflation. Yet, this positive economic indicator did not prevent the S&P 500 from slipping 1.2%, a stark contrast to its earlier 0.9% rise. The Nasdaq Composite fell even more, by 1.7%, with Salesforce and other tech stocks facing the brunt of the impact.

Interest rates rose, dampening the market’s initial optimism. The 10-year Treasury yield climbed past the pivotal 4.6% mark, reaching its highest point since mid-November. This increase came on the heels of the robust retail sales data.

Gold experienced a rollercoaster, initially dropping over 1% to $2,346.00 an ounce, then rebounding with a 1.1% surge, breaking past the $2,400 threshold for the first time. This volatility follows gold’s record high last week, with an around 15% increase this year as investors flocked to the metal amidst persistent inflation and geopolitical unrest.

Oil prices saw a slight decline, relinquishing earlier gains, yet managed to recover from the day’s lows in later trading, exerting additional pressure on the market. The cumulative effect of Monday’s downturn added to the previous week’s significant losses, driven by ongoing inflation worries and a disappointing start to the corporate earnings season. Both the Dow and S&P 500 recorded their worst weekly performances since the previous year.

As bond yields soared and the dollar reached its highest level since November 13th, Bitcoin’s value declined, oil prices bounced back from initial losses, and gold fluctuated before closing at a new all-time high.

Ultimately, the S&P 500 adjusted downward, aligning with the reality of higher bond yields.

As we close out this Tax Day, could this be the turning point that marks the end of the current market correction?

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