Investing.com – Top 5 things that rocked U.S. markets this week
1. US Stocks Sidestep Tariff Tantrums; Media Stocks in Demand
Familiar market foes returned to US stock markets this week as the U.S. and China vowed to move ahead with trade tariffs, while the prospect of a faster pace of monetary policy tightening also weighed on sentiment.
That, however, didn’t stop US stocks from notching a third-straight weekly win as a rally in tech and media stocks underpinned investor demand.
U.S. District Court Judge Richard Leon ruled in favour of the AT&T Inc (NYSE:T) and Time Warner Inc (NYSE:TWX) merger earlier this week, sparking a wave of action in media stocks.
A day after the ruling, Comcast launched a $65 billion bid for Twenty-First Century Fox Inc (NASDAQ:FOX) assets that Walt Disney Company (NYSE:DIS) had already struck a deal to buy, setting the stage for an intense bidding war.
Some market participants said a bidding war would be unlikely, however, as the much larger Comcast Corp (NASDAQ:CMCSA) would likely match an increased offer from Disney.
The Fed rate hike on Wednesday, meanwhile, was accompanied by a more hawkish outlook on rate hikes. The U.S. central bank hinted at the prospect of two additional rate hikes this year, taking the expected total rate hikes for 2018 to four from three previously.
The S&P 500 posted a weekly win despite closing 0.25% lower Friday at 2,781.50.
2. Crude Oil Prices Slump as OPEC Meeting Looms
Crude oil prices settled sharply lower Friday on concerns that OPEC would lift limits on production restrictions, paving the way for an uptick in global output, threatening the pace of rebalancing in oil markets.
Investor fears that OPEC and its allies would hike output at its June 22 meeting came to the fore this week amid remarks from both Russia's Energy Minister Alexander Novak and Saudi Arabia's Energy Minister Khalid al-Falih.
Russia Energy Minister Alexander Novak said Thursday - after talks with Saudi Energy Minister Khalid al-Falih - that both Russia and Saudi Arabia agreed to gradually increase production.
While, Saudi Arabia's Oil Minister Al Falih said an increase in production was inevitable but insisted that production hikes would be reasonable and won't be anything "outlandish."
Crude futures settled 2.74% lower on Friday as data showed U.S. oil rigs continued to climb.
3. Dollar Rides Euro Slump to Glory
The dollar closed at year-to-date highs against its rivals despite a modest setback Friday, as a sharp tumble in the euro earlier this week encouraged traders to pile into the greenback.
The euro suffered its worst daily loss in two years on Thursday after the European Central Bank said that it would leave interest rates unchanged until the summer of 2019.
That came a day after the Federal Reserve had signalled a faster pace of rate hikes for this year and the next, further encouraging investor appetite for the greenback.
The dollar fell 0.16% to 94.79 against a basket of major currencies on Friday.
4. Gold Prices Tumble to 2018 Lows
Gold prices fell to 2018 lows on Friday as traders appeared to unwind their holdings of gold despite the growing prospect of a trade war between the U.S. and China.
China ignored U.S. President Donald Trump's threat of further tariffs in the event of retaliation, vowing to immediately impose penalties of the "same scale" on American goods, raising the prospect of a tit-for-tat trade war between the world's two largest economies.
That, however, failed to lift demand for safe-haven gold amid expectations the dollar will continue its upside momentum after the Fed earlier this week hinted at a faster pace of monetary policy tightening.
The odds of a fourth rate hike at the Fed's December meeting has soared to 51.1% from 33.8% the previous week, according to Investing.com's Fed Rate Monitor Tool.
5. Bitcoin Wobbles as Traders Scramble
A sea of red emerged in cryptos this week, wiping more than $60 billion from the market, as bitcoin fell to a near four-month low before staging a timid rebound.
Bitcoin started the week on the back foot after South Korean crypto exchange Coinrail confirmed in a tweet cyber thieves had made off with over $30 million worth of lesser-known cryptocurrencies following a successful cyberattack.
That proved to be touch paper for further selloffs as the popular crypto fell close to a four-month low of $6,125.7, rattling traders' appetite to hold cryptos as billions of dollars were pulled from the market.
The total crypto market cap fell to about $282 billion, at the time of writing, from about $342 billion a week ago.
Over the past seven days, Bitcoin fell 18.67% on the Bitfinex exchange, Ethereum fell 14.04%, while Ripple XRP fell 19.29% on the Poloniex exchange.