US stocks witnessed heavy volatility yesterday, with the S&P 500 and the Dow Jones industrial average shedding more than 4%. The Dow recorded its biggest daily drop as it fell by about 1600 points. US stocks erased their gains from this year.
US stocks rose to record highs since Trump won the presidential election in light of his campaign promises to cut taxes and increase infrastructure spending and had been up about 24% since the election.
On the other hand, the foreign exchange market was relatively calm compared to the large declines in the stock markets. The dollar fell slightly, as the dollar index fell from its highest since January 24 at 59.58 from the beginning of today’s trading. Yesterday's sharp sell-offs helped to boost the dollar against some of its rivals, especially the euro, sterling and commodity currencies.
US 10-year bond yields fell from a four-year high of 2.885% yesterday.
On the commodity side, oil prices continued their decline for the third day in a row to reach their lowest level since January 22 at $ 63.27 a barrel, while Brent crude fell to levels of 66.79 dollars, the lowest level in nearly a month.
Bitcoin has fallen more than 13% in trading today, losing more than half of its value since the beginning of 2018 so far. The declines were due to worries about more regulation of digital currency trading, which caused Bitcoin and other cryptocurrencies to decline sharply. Bitcoin hit its historic highs in December at $ 20,000, only to reach the lowest levels since last November at $5,000.
The highlight of the economic calendar for today is New Zealand employment data due to be released late in the evening. Employment levels are expected to rise by 0.4% in the last quarter of 2017 after rising by 2.2% in the third quarter of the same year.
