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Financial Markets Experience Volatility Amid Economic Slowdown

The stock market witnessed a decline on Wall Street, with Nasdaq facing its largest loss. Meanwhile, Bitcoin approached a new high but closed the day with a 7.6% decrease at $62,380. Gold reached a record level due to bets on Federal Reserve interest rate cuts.

US economic data revealed a slowdown impacting stocks and the dollar value. Tom Heinlein, from the Wealth Management at a US bank, described the situation as challenging, stating, “It’s a tough day. The economy is slowing down, and it’s not just about interest rate cuts.”

Despite this, Bitcoin almost reached a new high before a slight dip, closing the day with a 7.6% decrease at $62,380. Analyst Chuck Carlson from Horizon Investment Services noted that after significant stock increases, people are reallocating funds in search of better returns. Gold, fueled by expectations of Federal Reserve interest rate cuts, also reached a record level.

Economic reports indicated a slowdown in the US service sector and a larger-than-expected drop in new factory orders. The Dow Jones index fell by over 400 points, the S&P 500 lost more than 50 points, and the Nasdaq dropped by about 270 points. European stocks declined as China’s efforts to boost its economy fell short. Global indices, including the Stoxx 600 and MSCI World Stocks, experienced losses, along with emerging market and Asia-Pacific stocks.

The dollar weakened against major currencies after disappointing US data. The euro and yen saw slight gains against the dollar, while the British pound also rose slightly. US Treasury bond yields reached a one-month low as prices rose, with investors anticipating the upcoming jobs report.

Oil prices also fell, with both US crude and Brent crude dropping amid doubts about China’s economic growth plan. However, gold continued to shine, reaching an all-time high as people bet on the Federal Reserve starting interest rate cuts in June, with the precious metal’s price rising 0.7% to over $2,129 per ounce.

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Stocks faced challenges ahead of key economic reports, continuing the downward trend from the previous day. Bitcoin, however, achieved a new record since late 2021, briefly surpassing $69,000 before a slight pullback.

Simultaneously, the Nasdaq dropped by about 1.7%, and the Dow Jones fell by 0.8%, or nearly 300 points. The major technology companies, often referred to as the “Big Seven,” all witnessed declines. In a positive note, Target’s stock surged after the retailer announced an increase in profits, while GitLab’s stocks took a hit after the company provided disappointing forecasts.

Gold’s price continued to rise, benefiting from its highest level recorded on Monday. Meanwhile, the yield on 10-year Treasury bonds slightly decreased after stabilizing at 4.218% the previous day. In Asia, the Hang Seng index in Hong Kong fell, but mainland China stocks showed some improvement after the Chinese government set a target of around 5% economic growth in 2024, despite significant challenges.

Important Notice: Disclaimer Regarding Financial Advice
The information presented in this article is intended solely for informational purposes and should not be considered as financial advice. disclaims any responsibility for investment decisions made by individuals relying on the information provided herein. It is highly recommended to consult with a qualified professional or financial advisor before making any investment decisions. Your financial well-being is crucial, and seeking expert guidance ensures that your investment choices align with your individual financial goals and risk tolerance.

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