US markets started the day on a positive note, but a combination of factors led to a sharp sell-off in the afternoon, with major indices finishing in the red. The Dow Jones closed down 1.4 per cent, the S&P500 down 1.2 per cent, and the Nasdaq down 1.4 per cent.
Tech and Healthcare sectors were the worst performers, dropping 1.7 per cent and 1.4 per cent respectively. Energy was the only sector to finish flat, down just 0.06 per cent for the day.
The sell-off was triggered by comments from Minneapolis Fed President Kashkari suggesting that the central bank may not need to cut rates if inflation remains high. This pushed treasury yields higher, adding to market concerns.
In addition, a rally in oil prices in the afternoon further spooked traders. Crude oil prices surged, with WTI closing 1.3 per cent higher at $86.59 per barrel and Brent closing 1.45 per cent higher at $90.65 per barrel. Geopolitical tensions in the Middle East also contributed to the market jitters.
Investors are now eagerly awaiting the release of the March nonfarm payrolls report, with expectations for a 200,000 rise in payrolls. Any surprises in the data could impact the Fed’s decision on rates.
Meanwhile, copper prices rallied to a 14-month high due to supply concerns, despite worries about demand from China’s property sector. India’s infrastructure spending and the global AI industry are expected to drive demand for the metal.
Overall, global markets showed mixed results, with European markets closing mixed and Asian markets posting gains. The Australian share market closed higher, but SPI futures are pointing to a 0.8 per cent fall.