To The Moon

On Wed, 16 Apr 2025, US stock markets experienced another sharp decline, with all 3 major indices closing significantly lower. (see below) This marked a continuation of the week’s downward trend, erasing earlier gains and deepening investor anxiety. By the time market called it a day: DJIA : -1.73% (-699.57 to 39,669.39). S&P 500: -2.24% (-120.93 to 5,275.70). Nasdaq: -3.07% (-516.01 to 16,307.16). Root Causes. The market’s fall was driven by a combination of escalating trade tensions and disappointing corporate news: (1) Fed’s Chair Pessimism: President Donald Trump’s aggressive new tariffs on Chinese imports and the uncertainty surrounding future trade policy have rattled investors. Fed Chair Jerome Powell warned that these tariffs are unprecedented in scale and could result in (a) higher inflation and (b) slower economic growth than previously expected. (see above) Powell’s remarks emphasized the risks of stagflation and signaled that the Fed may not intervene quickly to cut rates, further dampening sentiment. Definition of stagflation - is an economic situation characterized by (1) stagnant economic growth, (2) high unemployment, and (3) high inflation occurring simultaneously. (2) Nvidia Export Restrictions: $NVIDIA(NVDA)$, a bellwether for the tech sector, announced that new US government restrictions on exporting advanced AI chips to China would cost the company $5.5 billion in lost revenue. (see below) Given Nvidia’s clout in the US market, the news led to a nearly -7% drop in its stock price and sparked a broad sell-off in technology shares. (see below) $Advanced Micro Devices(AMD)$ was not spared from Trump’s chips export rule too. (see below) AMD said it could incur charges of up to $800 million for exporting its MI308 products to China and other countries. As a result, its shares fell by more than -5% on Wednesday. (3) Investor Uncertainty: The combination of trade policy unpredictability, inflation fears, and disappointing tech sector news has created a “fog” of uncertainty. Investors are increasingly concerned about the possibility of recession or stagflation, and the lack of a clear signal from the Fed about future rate cuts has added to the market’s volatility. Thursday, 17 April 2025 Market Closure: US stock markets will be closed on Fri, 18 Apr 2025, to celebrate Good Friday, making Thu, 17 Apr 2025 the last trading day of the week. Odds of a Thursday Rally: Historically, markets can experience a “holiday effect” where stocks rebound ahead of a long weekend. However, given current conditions of news, persistent trade war fears, hawkish Fed commentary, and sector-specific shocks — all suggesting that optimism will be muted. While futures showed some stabilization after hours, investor sentiment remains fragile, and any rally this Thursday: Would likely be limited. Driven by short-term technical factors or bargain hunting rather than a shift in fundamentals. Finally, there is the “Weekend effect” (or Monday effect) a recognized phenomenon in financial markets, where stock returns on Mondays are often significantly lower than those on the preceding Friday. This was first documented by Frank Cross in his 1973 article “The Behavior of Stock Prices on Fridays and Mondays”. No Over Weekend Positions. Below are the reasons: (1) Price Gaps: Markets are closed over the weekend, any significant news or events can cause the market to open at a very different price on Monday, resulting in “gaps” that can bypass stop-loss orders and lead to unexpected losses or gains. (2) Unexpected News: Companies and governments sometimes release negative news after the market closes on Friday, that can depress prices when markets reopen come Monday. (3) Lower Liquidity: With fewer participants and no trading during the weekend, liquidity is lower, that can result in wider spreads and more volatile price movements when the market reopens36. (4) Market Sentiment Shifts: Investor sentiment can change over the weekend due to global events, leading to unpredictable price movements at the open. Settlement and Margin Risks: Holding leveraged positions increases the risk of margin calls if the market moves unfavorably while it is closed. Now that you know about the weekend effect, will you still buy shares on Friday ? Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks. Banks failed to lift US Market. How ? S&P 500 sees Death Cross, is "Cash" King now ? NVDA, #1 Chipmaker. Not the end yet ! Do you think US market will close on a high on Thursday, pre-Good Friday ? Do you think Trump will announce more news on tariffs over the weekend ? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. Thank you. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents