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3:23 PM ยท 5 August 2025

US100 drops 0.6% ๐Ÿ“‰

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Today's declines on Wall Street are due to profit-taking following the July ISM report on the services sector, which showed continued inflationary pressure in the United States, accompanied by a decline in orders and employment indices. Investors had hoped that the price component would weaken compared to June's reading, but instead it rose to levels not seen in nearly three years. US100 contracts are down nearly 0.6% and testing the 23,200 point level. Similar declines are seen in other 'risky' assets, including the cryptocurrency market and smaller US stocks. The correction in stocks began despite the excellent results presented by the largest US technology companies, but its scale is currently very small.

ISM data for the US services sector – July

  • ISM Services: 50.1 points vs. 51.5 expected and 50.8 in June

  • Prices paid: 69.9 vs. 66.5 expected and 67.5 in June

  • New orders: 50.3 vs. 51.3 in June

  • Employment: 46.4 vs. 47.2 in June

It is also worth noting the deterioration in export and import components:

  • New exports: a decline of 3.2 percentage points in July 

  • Imports: a decrease of 5.8 percentage points.

This data set means that the Fed may still be reluctant to ease monetary policy prematurely, although the risk is increasing due to the weaker labor market. BigTech stocks are holding up relatively well, but Nvidia (NVDA.US) is down more than 1.2%, and Taiwanese chipmaker Taiwan Manufacturing (TSN.US) is down nearly 3%. The US dollar has weakened, and the euro-dollar is recovering its losses. Investors are no longer sure whether the US economy will suffer a sudden downturn, while Donald Trump is threatening to raise tariffs on more trading partners, including the EU and India. The final shape of the trade agreement with China also seems uncertain, despite optimistic comments from the White House.

US100

Nasdaq 100 (US100) contracts are experiencing their first 'serious' sell-off since the last rollover. The contract has fallen below the 100 and 200-session moving averages, and today's trading volume is significantly dominated by selling. A test of the 22,200 points level from August 1 seems possible.

 

Source: xStation5

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