Global markets experienced significant declines as geopolitical tensions intensified, particularly in the Middle East. The Nasdaq Composite slumped 2.2 per cent, while both the Nasdaq and Dow Jones Industrial Average closed in correction territory, each falling 10 per cent below their recent peaks. Escalating conflict between Iran and Israel, alongside Houthi threats, contributed to a spike in market volatility and uncertainty among investors. Atlassian, an Australian software company that develops collaboration, development, and project management tools, saw its shares decline by 4.4 per cent, bringing its year-to-date losses close to 60 per cent.
The S&P 500 fell 1.7 per cent, with consumer discretionary and financial stocks leading the decline across eight of the eleven industry sectors. Major tech companies like Meta Platforms and Amazon experienced further losses, continuing the downward trend among the ‘magnificent seven’. Analysts suggest that the market may still have room to fall, with potential for the S&P 500 to decline further and the US 10-year note yield to rise. Despite the prevailing bearish sentiment, some analysts believe that the selling pressure may be nearing its end, particularly with month-end pension flows expected to offer some support to US equities.
Looking ahead, the Reserve Bank of Australia is scheduled to release minutes from its February policy meeting. The coming week also brings key economic data releases, including building approvals, job vacancies, and trade data in Australia, as well as manufacturing updates from China. In the US, labour data will be closely watched, with job openings, ADP private data, and March payrolls all due for release. Federal Reserve officials, including Chairman Jerome Powell, are set to make public appearances, potentially influencing market sentiment.
