Investors Seek Safe Havens as S&P 500 Corrects Amid Economic Uncertainty
The S&P 500, a key U.S. equities index, has dropped just over 10% from its July 31 peak due to growing concerns of a U.S. economic recession.
This decline, characterized by experts as the first correction since late 2022, comes as the Dow Jones Industrial Average also ended October 2023 on a 1.7% lower note. This decline followed the news of the 10-year U.S. Treasury notes yield crossing the 5% threshold for the first time since 2007. As the S&P 500 reached 4,117 points, media reports and economists concurred that this drop marked a move into correction territory, with the trend expected to continue until it becomes a “big deal.” Poor earnings reports from major corporations like Ford and Chevron contributed to losses in all three major U.S. stock indices during the week ending on October 27.
On the other hand, investors have sought refuge in safe-haven assets such as U.S. Treasuries, gold (which rose above $2,000 per ounce for the first time since May), and Bitcoin (BTC). BTC’s value has exceeded $35,000 for the first time since March 2022, driven by speculation about the potential approval of spot Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). Some believe that the rise of BTC and gold may be linked to concerns about a potential U.S. economic recession akin to that in 2008.
Clever Robot News Desk 31st October 2023
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