Investing.com – Take a peek at the top 5 things that rocked U.S. markets this week.
The ‘Trump Dump’ bottomed out
U.S. stocks recovered from a slump last week, as the Nasdaq and S&P 500 closed in record territory on Friday, buoyed by a surge in tech stocks and a reduction in U.S. political turmoil amid President Trump’s absence, as he continued his first trip abroad since taking office.
The Dow, S&P 500 and Nasdaq closed positive for the week.
Gold glittered its way to a three-week winning streak
Gold futures notched a three-week winning streak, after closing nearly 1% higher on Friday, despite a rise in investor expectations the Federal Reserve would hike its benchmark rate in June in the wake of an upward revision to U.S. economic growth.
According to investing.com’s Fed rate monitor tool more than 80% of traders expect the Federal Reserve to hike its benchmark rate in June, compared to below 70% of traders in the previous week.
The Federal Reserve minutes cooled longer-term rate hike expectations
The minutes to the Federal Reserve May 2-3 meeting, released on Wednesday, revealed some Fed members cautioned that longer-term rate increases would be subject to economic data showing the dip in first quarter economic growth had been “transitory”.
On the topic of balance sheet reduction, the central bank will announce cap limits on the total amount of maturing bonds it will allow to roll off each month without reinvesting.
The process will allow the central bank to gradually shrink its $4.5 trillion balance sheet, and eases concerns of investors, who were unsure whether the central bank would seek to adopt an aggressive approach to reducing its balance sheet.
The pound slumped amid UK election jitters
The pound fell sharply against the dollar to $1.2797, down 1.12%, with an opinion poll showing a narrowing in the Conservatives’ lead over Labour, raising uncertainty over the appeal of Theresa May’s leadership and the ruling party’s election manifesto.
A YouGov poll put the Conservative lead at five points, which is well below the Conservatives' sizeable 20-point lead held over Labour last month.
OPEC extended production cuts for nine more months
OPEC and non-OPEC members agreed to extend production cuts for a period of nine months until March on Thursday, after the output cuts agreed in November last year failed to rein in the glut in supply, which has pressured oil prices for nearly three years.
Oil prices tumbled nearly 5%, following confirmation of the deal extension, as market participants were not impressed with the deal and had expected the oil cartel to announce deeper cuts.
OPEC, however, announced that no new non-OPEC members will join the global deal to reduce supply and it would adhere to the production cuts of 1.8 million barrels a day agreed in late November.