Geopolitical Tensions Are the Main Factor in Equity Decline

 The United States (US)-China crisis continues to be the main focus of the market, making safe-haven assets gain momentum while equities experience less volatile trading sessions.


The actions of the Speaker of the US House of Representatives, Nancy Pelosi, who insisted on visiting Taipei, Taiwan, despite being warned by the Chinese government, has sparked geopolitical tensions between the two countries.


In addition, the US Department of Labor report saw the number of job offers drop 5.4% in June, indicating that the job market is weakening against a background of weak demand.


It was further explained that weak demand for jobs signaled low wages, and analysts projected hourly earnings growth to report a 0.2% decline compared to last month's 4.9% post.


The streak Dow Jones Industrial fell 1.23% at 32,396.17, the S&P 500 lost 0.67% at 4,091.19 and the Nasdaq Composite fell 0.16% at 12,348.76.


The pan-European STOXX 600 index lost 0.32% and MSCI's gauge of worldwide shares slipped 0.93%.



Emerging market shares fell 1.25% while MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.26% lower while the Nikkei lost 1.42%.


Currency trends showed the dollar giving back gains against other currencies with the greenback index gaining 0.79% while the Euro was down 0.93% at $1.0166 while the Japanese Yen strengthened 1.12% at $133.33.


In the meantime, the yield of the US Treasury also rose in the uncertain trading session of the market.


The benchmark 10-year note fell 43/32 in price to yield 2.761% from 2.605% while the 30-year bond slipped 3/4 in price to 3.02685 from 2.925%.


As for commodities, oil prices are seen rising ahead of the OPEC+ meeting this week which may see an increase in global crude oil supply despite less demand.


US crude was up 0.56% at $94.42 while Brent crude jumped 0.51% at $100.54.


Gold assets reversed past gains as spot gold fell 0.6% at $1,761.29 per ounce.

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