Key Influencers To Watch! Can We Come Out From Market Downturn Past Week?

Last week, we saw the stock market experienced a downturn with significant indexes reporting losses. The Russell 2000 decreased by 2.8%, the S&P 500 fell by 3.1%, and the Nasdaq Composite saw a 5.5% drop.

Only Dow Jones Industrial Average remained relatively stable, showing no significant change over the week. While we look forward to this week market performance, we need to understand how the market sentiment influencing sector and overall market performance.

If we look at the various factors affecting the market sentiment, these includes the rising interest rates, geopolitical tensions, and sector-specific weaknesses. The largest declines sectors we saw affected by weakness in mega-cap stocks are the information technology (-3.08%), consumer discretionary (-1.19%), and communication services (-2.03%) sectors.

Whereas we saw these sectors, like the Utilities (+1.47%), Financials (+1.35%), Energy (+1.12%) and Consumer Staples (+0.95%) sectors managing to record gains. I have wrote about the consumer staples in previous article, I believe we should be seeing gains continued for this sector in coming weeks.

Within the semiconductor sector, we saw the most impacted names with Nvidia leading with significant drop of 13,6%, despite no specific news driving this decline. ASML and TSMC were also among the most impacted within the sector, with respective weekly declines of 10.6% and 10.4% after their quarterly reports.

Throughout the week we saw economic data release that has caused mixed impacts on the market. Retail sales showed continued consumer spending, while housing starts and building permits indicated a supply-constrained housing market. Industrial production saw growth, driven by manufacturing output. However, existing home sales were weak, reflecting challenges such as high prices and low inventory.

The market actions saw some initial buy-the-dip actions, but these faded as the trading sessions progressed. This has create a fluctuations sentiment throughout the week. The significant influence to the market dynamics came mainly from semiconductor stocks and mega cap stocks.

Growing concerns over artificial intelligence spending has caused this downturn, and we could see that it has impacted the quarterly results. Broadcom (AVGO) has also suffered losses. For now, we might want to look at the potential smaller

Netflix faced a downturn after announcing it would cease reporting subscriber numbers, a move that has sparked investor concern despite the company's subscriber growth and financial performance exceeding expectations. This decision contributed to a broader market unease, affecting technology stocks and the overall market sentiment.

Banking regulators are considering a proposal that would require large banks to defer executive compensation and reclaim bonuses in case of significant losses. This measure aims to align executive incentives with long-term financial stability and risk management practices.

Bitcoin's fourth halving block sees additional $2.4 million reward paid as fee. Block 840,000, the fourth ever Bitcoin halving block, has been confirmed — though it could possibly change. The halving block appears to be from the crypto mining pool ViaBTC with a 37.6256 BTC ($2.3 million) fee.

The halving block appears to be from the crypto mining pool ViaBTC with an additional 37.6256 BTC ($2,401,399) "reward paid as fees of the 3,050 transactions which were included in the block," according to a bitcoin blockchain explorer from Blockchain.com.

Competition among miners revved up for who would obtain the historic fourth halving block for Bitcoin — and do something unique with it.

Last week was a challenging week for the stock market, semiconductor companies faced significant pressure, highlighting concerns over AI spending and its impact on future earnings.

This sector's performance, along with developments in healthcare antitrust cases and strategic corporate board appointments, shaped today's market narrative.

This week, I would focus on the crypto stocks and spot blockchain ETFs as there should be some pricing in for the halving, and it is important to understand how miners would be adjusting their operational strategy to increase the rate and reduce the difficulty level.

Appreciate if you could share your thoughts in the comment section whether you think crypto stocks and spot Bitcoin ETFs would make a move upside following Bitcoin halving last week.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.