Daily summary: Risk-off takes over 📉 US stocks plunge, while dollar and oil rebound sharply 💸

After a mixed start to trading, Wall Street moved into a decisive defensive posture. The Nasdaq slid 1%, further burdened by a sell-off in the software sector. The small-cap Russell 2000 index (-0.9%), the S&P 500 (-0.7%), and the DJIA (-0.65%) also traded in the red.

The declines in the main indices are primarily driven by fears of a return to military action in the Middle East. The Israeli Minister of Defense declared that the state is ready for another strike on Iran and is only waiting for the green light from the United States. Iranian media also reported the activation of air defence systems.

The sell-off in the software sector is due to investors' reaction to the results of ServiceNow (NOW.US: -19%), which disappointed investors regarding the monetization of AI solutions. The 22% year-over-year subscription growth was also considered "acceptable, but nothing spectacular".

Preliminary US PMI indicators for April rose above expectations, both in manufacturing (54 vs. 52.5 forecast; a 4-year maximum) and services (51.3 vs. 50.6 forecast). Nevertheless, the result is largely thanks to price components, which extended their growth, indicating rising inflationary pressure in business.

Meta (META.US), the parent company of Facebook and Instagram, announced a 10% reduction in employment to increase efficiency. Shares are down 2.5%.

European indices had a mixed session. Losses were recorded primarily by the Budapest (BUX: -1.1%) and Madrid (IBEX 35: -1.1%) stock exchanges. Germany's DAX (-0.15%) and the UK's FTSE 100 (-0.19%) closed slightly below the line, while the French CAC 40 (+0.87%) stood out with gains, supported by excellent results from STMicroelectronics (+14.4%) and L'Oréal (+9%).

The Forex market saw a sharp resumption of gains for the dollar (USDIDX: +0.2%) due to fears of renewed military action in Iran. Risk aversion pulled down all G10 currencies, especially the antipodean currencies (AUDUSD: -0.5%, NZDUSD: -0.8%). EURUSD lost 0.2% to 1.1680.

Brent crude oil added nearly 3.4%, trading just under the psychological level of $100 per barrel. NATGAS lost 4.25% after the publication of higher-than-expected EIA inventories. Gold returned to losses (-0.75% to $4705 per ounce).