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Last Week’s Market Summary: Stock Market Volatility and Oil Prices Surge

The stock market experienced a turbulent week, with the Dow Jones Industrial Average closing lower on Friday (Aug. 4) following a rollercoaster ride of trading. Initially, the market saw a rise after the US Department of Labor released lower-than-expected employment data, giving investors hope for a positive turn. However, the market’s upward momentum stalled later as investors expressed disappointment with the earnings reports of listed companies. For instance, Apple shares plummeted more than 4% after reporting declining quarterly sales.

At the closing bell, the Dow Jones Industrial Average stood at 35,065.62 points, marking a decrease of 150.27 points or -0.43%. Meanwhile, the S&P 500 closed at 4,478.03 points, down 23.86 points or -0.53%, and the Nasdaq closed at 13,909.24 points, experiencing a decline of 50.48 points or -0.36%.

Surging Crude Oil Futures

On the commodities front, crude oil futures experienced an impressive surge, reaching their highest level this year. This upward trend continued for a sixth consecutive week, primarily driven by the outcomes of the Joint Committee on Ministerial Examinations (JMMC) meeting of the Petroleum Exporting Countries (OPEC) and its allies, commonly known as OPEC Plus. The committee’s decision to reduce oil production until the end of next year contributed to the boost in crude oil prices.

The West Texas Intermediate (WTI) crude futures climbed $1.27, or 1.6%, settling at $82.82 a barrel and registering a 2.8% increase for the week. Similarly, the Brent crude futures rose $1.10, or 1.3%, settling at $86.24 a barrel, with a 2.2% increase for the week.

Gold Futures Rebound on Weak Dollar and Lower Bond Yields

Gold futures experienced a rebound on Friday (Aug. 4) after three consecutive days of losses. The rally was supported by a weakening US dollar and a decline in US government bond yields, which came in response to the lower-than-expected US employment numbers. Investors interpreted these figures as a signal that the US Federal Reserve (Fed) might delay interest rate hikes.

At the end of trading, gold futures rose by $7.30, or 0.4%, closing at $1,976.10 per ounce. Despite the recovery, they were still down 1.2% for the week. Silver futures also posted modest gains, rising by 2 cents, or 0.1%, to settle at $23.72 an ounce. Meanwhile, platinum futures surged $6.70, or 0.7%, to close at $928.50 per ounce, and palladium futures rose by $7.20, or 0.6%, settling at $1,264.60 per ounce.

US Dollar Weakens Against Major Currencies

The US dollar experienced weakness against major currencies in the basket on Friday (Aug. 4) following the release of lower-than-expected employment numbers. This development led to speculations that the US Federal Reserve (Fed) may adopt a more cautious approach to interest rate hikes.

The dollar index, which gauges the greenback against six major currencies, witnessed a decline of 0.52 percent, ending at 102.0145.

Notably, the US dollar depreciated against most major currencies, with the exception of the Canadian dollar. Against the yen, the US dollar weakened to 141.8580 yen from 142.7030 yen. Moreover, it slipped against the Swiss franc, settling at 0.8727 Swiss francs compared to 0.8751 Swiss francs. The dollar also weakened against the Swedish krona, dropping to 10.5834 krona from 10.7100 krona. However, it showed strength against the Canadian dollar, rising to 1.3379 Canadian dollars from 1.3354 Canadian dollars. Additionally, the euro rose against the dollar, reaching $1.1009 from $1.0944, while the British pound also surged to $1.2754 from $1.2701.

In conclusion, last week’s market witnessed significant fluctuations in the stock market, led by disappointing earnings reports and volatile trading. Meanwhile, crude oil prices surged to their highest level of the year, driven by OPEC Plus’s decision to reduce oil production. On the commodities front, gold experienced a rebound, benefiting from a weakened US dollar and lower bond yields. However, the US dollar itself showed weakness against major currencies due to lower-than-expected employment numbers, fueling speculations of a more cautious approach to interest rate hikes by the Federal Reserve. Investors will be closely monitoring these developments in the coming week to gauge their impact on the global financial landscape.

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