S&P 500 Ends Week Lower, As Risk Assets and Safe Havens Fall

Following a 15% rally in the S&P 500 this year, stock markets are now under significant pressure. The prevailing trend is limiting risk, with assets across the board facing declines. All asset classes are affected: bonds, megacap tech firms, stock indices, safe havens such as Gold and the Swiss franc, commodities (including a 3% drop in oil prices), and commodity-linked currencies.

S&P 500 Chart Daily – The 20 SMA Has Been Broken

Crowdstrike Incident Adds to Market Woes

Overnight, Crowdstrike released an update that caused Microsoft programs to crash and led to technical issues for some users. Consequently, shares of Crowdstrike have plummeted by about 10%. This incident has further contributed to the overall market retreat, with participants reducing their leverage and pulling out of the market after a strong year.

Broad Market Declines

• Dow Jones Industrial Average: Reached a low of 40,215 points, down 1%.
• S&P 500: Recently hit a bottom just above 5,500 points, losing 40 points or 0.70%.
• NASDAQ: Fell to a low of 17,718 points, losing approximately 130 points or 0.80%.

De-Risking Amid Volatile Conditions

The current market retreat is driven by more than just the Crowdstrike fiasco. Investors are de-risking and avoiding excessive exposure to financial assets amid volatile political conditions. The AI and chipmaker sectors, which have seen substantial rallies, are also due for a breather.

Fed Risk Premium Ahead of September FOMC Meeting

There is a Fed risk premium in play for the upcoming September FOMC meeting. Although the Federal Reserve is expected to cut interest rates, there is a chance they might refrain from doing so, which could impact the US consumer and further affect market sentiment.

S&P 500 Live Chart

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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