US Stock Market Rebounds as Traders Flock to Tech Giants Amidst Economic Uncertainty

　　

Despite earlier losses, the US stock market made a significant recovery as traders flocked to some of the world’s largest technology firms, viewed as a reliable haven amidst economic uncertainty and market volatility. In the wake of recent banking instability, these technology stalwarts have generally outperformed other sectors. Despite Treasury Secretary Janet Yellen’s assurances to lawmakers that further steps would be taken to safeguard deposits, banks experienced a decline in value. It is notable that, in the last week, banks only slightly reduced their borrowings from two Federal Reserve backstop facilities, indicating that financial institutions are taking advantage of the central bank’s liquidity in the aftermath of recent market upheaval.

Mega-cap technology firms such as Apple Inc. and Microsoft Corp. saw gains that brought the Nasdaq 100 close to a bull market, rising almost 20% from its December low. Meanwhile, the S&P500 remained largely unchanged on Thursday, with only two out of eleven stocks showing positive performance. Communication services and information technology, however, experienced a rally, with gains of 1.83% and 1.65% respectively. The Dow Jones Industrial Average also edged higher by 0.2%, and the MSCI world index saw a 0.5% rise on Thursday.

Main Pairs Movement

On Thursday, the dollar bounced back after earlier losses when the U.S. Federal Reserve hinted that it might not increase interest rates anytime soon. Meanwhile, the Swiss National Bank and Bank of England continued with their plans to raise interest rates. The DXY index spent most of the day fluctuating between 102.0 and 102.65, eventually closing at 102.6.

The EUR/USD, which had been on a five-day winning streak, lost ground as the U.S. Dollar regained strength. Towards the end of the Wall Street session, concerns over the banking industry sent Treasury bonds and the dollar higher, resulting in a drop for the pair. Although it had reached a high of 1.0933 earlier in the European session, it fell below 1.0830 in New York, losing most of the gains made after the FOMC meeting.

Gold prices continued to surge higher and traded around $1,995 per troy ounce on Thursday. The XAU/USD pair extended its post-Fed rally as the U.S. central bank hinted at a dovish approach during its Wednesday meeting, causing a sell-off of the dollar. The pair saw fresh activity during the early American trading session and closed with a daily gain of 1.18%.

Economic Data

Currency	Data	Time (GMT + 8)	Forecast
GBP	Retail Sales (MoM) (Feb)	15:00	0.2%
EUR	German Manufacturing PMI (Mar)	16:30	47.0
GBP	Composite PMI	17:30	52.7
GBP	Manufacturing PMI	17:30	50.0
GBP	Services PMI	17:30	53.0
EUR	EU Leaders Summit	18:00	N/A
USD	Core Durable Goods Orders (MoM) (Feb)	20:30	0.2%
CAD	Core Retail Sales (MoM) (Jan)	20:30	0.2%