Hello traders, and welcome to Friday, the final trading day of February. The market sentiment remains bearish, following Thursday’s sharp sell-off in global indices and the ongoing collapse in Bitcoin. Investors are cautious this morning as they await U.S. Core PCE Price Index data, which is expected at 0.3% and will be closely watched by the Federal Reserve for inflation signals.
Thursday was brutal for global indices, particularly in the U.S., where Nasdaq continued its slide, contributing to a 5% weekly decline. The sell-off was driven by ongoing geopolitical risks, including trade tensions between the U.S. and European Union.
NVIDIA’s earnings report from Wednesday, despite being better than expected, triggered a negative market reaction, with the stock plunging 8% on Thursday, pushing its market cap below $3 trillion. This tech shock reverberated across the tech sector, contributing to the broader sell-off in American indices.
European indices, which had shown resilience earlier in the week, caught up with the U.S. sell-off on Thursday and are trading lower this morning as well. European futures are sharply down, reflecting renewed selling pressure as the bearish momentum intensifies.
Bitcoin remains under heavy selling pressure, trading below $80,000, and is on course to test $72,000 soon. The cryptocurrency market sentiment is extremely bearish, with no signs of reversal. The ongoing collapse in Bitcoin is influencing risk sentiment across financial markets, contributing to the negative tone.
In the currency market, there is a clear flight to safety as investors seek refuge in safe-haven currencies. The American Dollar is gaining strength, reflecting risk-off sentiment. The Japanese Yen is also showing modest gains, while the Swiss Franc continues to perform well.
On the other hand, the Australian Dollar and New Zealand Dollar are struggling, having lost almost 2% this week, pressured by weak economic data and geopolitical uncertainties.
The commodities market remains bearish, with metals struggling across the board. Gold is down nearly 3% for the week, and Silver has lost almost 5%, reflecting profit-taking and dollar strength. Oil attempted a modest recovery, but the week remains negative, and the selling pressure continues amid demand concerns and a stronger Dollar.
The key event for today is the U.S. Core PCE Price Index, expected at 0.3%, which is closely watched by the Federal Reserve as an inflation gauge. A higher-than-expected reading could reinforce fears of persistent inflation, strengthen the Dollar, and add to the selling pressure on indices and metals.Other notable data releases include German inflation and Canadian GDP.
As we approach the final trading day of February, the bearish momentum is strong, with indices struggling, Bitcoin collapsing, and commodities under pressure. The flight to safe-haven assets indicates a risk-off sentiment, and today’s PCE Price Index data will be crucial for market direction.