Investing.com – Top 5 things that rocked U.S. markets this week
1. Tariff Turmoil Tanks US Stocks
US markets were swayed by a rally in tech and fears of a U.S.-China trade war, but it was the latter that ultimately prevailed, leaving the major U.S. indexes nursing a weekly loss.
The U.S. and China exchanged a fresh volley of trade threats, scaling back investor appetite for risker assets amid fears of an tit-for-tat trade war between the world's two largest economies.
Trade war concerns failed, however, to stem demand for tech stocks as major tech blue chips such as Facebook (NASDAQ:FB), Netflix (NASDAQ:NFLX) and Google (NASDAQ:GOOGL) rallied sharply, helping the Nasdaq close at a record high this week.
Internet retailers like eBay Inc (NASDAQ:EBAY), Amazon.com Inc (NASDAQ:AMZN) and Overstockcom Inc (NASDAQ:OSTK) came under pressure Thursday, however, after the U.S. Supreme Court overturned the Quill ruling, allowing states and local governments to start collecting sales taxes from internet retailers.
Shares of Twenty-First Century Fox Inc (NASDAQ:FOX) were also in demand for the second week in a row after the media company accepted an improved $71 billion bid from Walt Disney Company (NYSE:DIS).
The S&P 500 posted a weekly loss despite closing 0.25% higher Friday at 2,759.50.
2. Crude Oil Prices Soar as OPEC Hike Cheered
OPEC agreed Friday to a modest increase in output, sending crude oil prices soaring on expectations that the fresh supply into the market would be curbed as some countries lack the capacity to raise output.
OPEC said it wanted countries –part of the production cut agreement – to increase production, returning to 100% compliance with agreed quotas by 1 July 2018.
Analysts said the agreement would equate to increase in production of about 600,000 barrels a day as numerous countries in the accord aren't capable of increasing production.
Crude prices were also supported by a mixed U.S. inventory report as domestic crude supplies fell for the second straight week while crude products such as gasoline and distillate increased by more than analysts had forecast.
Crude futures settled 4.64% higher at $68.58 higher on Friday.
3. Euro Spoil's Dollar's Week
The dollar ended the week lower as trade war concerns flared up, stoking demand for safe-haven yen, while a rebound in the euro on mostly positive economic data also weighed on sentiment.
EUR/USD rebounded from an 11-month low seen Thursday, prompting traders to flee the greenback despite lingering concerns over Italian political uncertainty and lower-for-longer interest rates in the Eurozone.
The dollar's sluggish end to the week comes just days after its rise to fresh 2018 highs was met by a wave of resistance despite expectations that a more hawkish Federal Reserve would provide further room for upside in the greenback.
"The divergence between U.S. and rest of the world monetary policy will support longer and greater USD strength than we had anticipated," Barclays said earlier this week in a note to clients.
The dollar was also held back by yen strength supported by rising trade tensions between the U.S. and China.
The dollar fell 0.36% to 94.20 against basket of major currencies on Friday.
4. Gold Fails to Ride Dollar's Dash Lower
Gold prices bounced from fresh 2018 lows this week but remained under pressure struggling to take advantage of a weaker dollar and rising safe-haven demand as sentiment on the yellow metal waned.
Fearing a faster pace of Federal Reserve rate hikes, investors have shunned the yellow metal even as safe-haven demand grows on the back of an ongoing trade spat between the U.S. and China.
5. Bitcoin Slumps as Traders Flee
Fresh selling was seen in Bitcoin (BitfinexUSD) Friday, as the crypto hit its lowest level since February after Japan's regulatory crackdown on the industry triggered a selloff.
Japan's largest crypto exchange, bitFlyer, suspended the creation of new accounts after Japan's Financial Services Agency ordered several cryptocurrency exchanges to step up their efforts to combat money laundering.
That sent shockwaves through the crypto industry amid fears other crypto exchanges in Japan could also be forced to scale back operations as they seek to beef up their practices.
As Japan is the largest market for bitcoin trading, the threat of a reduction in fresh fund inflows, sparked selling across cryptos, wiping more than $20 billion from the crypto market in under 24 hours.
The total crypto market cap fell to about $261 billion, at the time of writing, from about $289 billion Thursday.
Over the past seven days, Bitcoin 4.84% on the Bitfinex exchange, Ethereum fell 3.82%, while Ripple XRP fell 8.53% on the Poloniex exchange.