How We Got Here - 2018’s Major Market Catalysts

2018 has already proven to be a rollercoaster year for the major North American indexes.

From the new face of the US Federal Reserve stirring things up to a potential trade war between China and the US, the markets have seen their fair share of drama this year.

Understandably, many investors and market watchers are wondering what’s to come.

While we at Investing News Network can’t answer that, we can give you a rundown of some of the key events that have swayed and affected market prices and volatility so far in 2018. Here’s the full timeline of major market catalysts.

Major market catalysts: January

• January 4: Dow Jones breaks the 25,000 mark
  • After the Dow Jones Industrial Average (INDEXDJX:.DJI) soared past 24,000 for the first time in November 2017, it reached another milestone in January when it hit 25,000. A major reason for the breakthrough was a stronger-than-expected jobs market in the US — overall, the US private sector added 250,000 new jobs in December 2017.

• January 16: Dow Jones breaks record for fastest 1,000-point rise
  • Over the span of seven trading days, the Dow broke yet another record and hit the 26,000 mark, rising over 1,000 points in just a few weeks. Some experts questioned whether the Dow’s continued January success was a “melt up,” which refers to a rapid price increase based on feelings, such as the fear of missing out on big gains.

• January 19: US government enters partial shutdown, gold sees gains
  • When US Senate members were unable to reach a deal to resume funding for federal operations, the government officially entered a partial shutdown. As the news broke, the US dollar fell while gold prices grew, rising 0.2 percent over the weekend.

• January 25: Gold hits highest price since mid-2016
  • As the US dollar hit three-year lows after US Treasury Secretary Steven Mnuchin said he welcomed a weaker currency, gold found its highest mark since August 2016, with news outlets reporting highs of up to US$1,370.50 per ounce.

Major market catalysts: February

• February 5: Dow Jones takes largest point plunge in history
  • In one record-shattering day, the Dow closed with a loss of 1,175 points, seeing losses of almost 1,600 points at its lowest level that day. The drop was sparked by a variety of causes, including fears of future interest rate hikes and inflation.

• February 8: Dow Jones drops over 1,000 points in one day — again
  • Just days after the Dow broke records for its largest one-day drop in history, it tumbled on a four-digit scale once again. Closing with a loss of 1,032.89 points, the dramatic decline sent the stock market into correction territory.

• February 27: New Fed chair sparks inflation fears among investors
  • Jerome Powell startled investors when he gave his first testimony to the House Financial Services Committee after being officially appointed as Fed chair in February. His statements, which were both optimistic and opinionated, struck fear into the hearts of investors as they worried additional interest rate hikes could be soon on the horizon. Stocks immediately fell, while treasury yields flew.

Major market catalysts: March

• March 8: Trump officially orders steel and aluminum tariffs
  • US President Donald Trump made a heavily anticipated move to place a 25-percent tariff on imported steel and a 10-percent levy on imported aluminum.

• March 21: US Federal Reserve hikes interest rates
  • In a widely expected move, the Fed raised interest rates from 1.5 percent to 1.75 percent. While the US dollar took a hit from the Fed’s decision, the price of silver made some traction and boosted from US$16.42 per ounce to US$16.56 after the hike’s official announcement.

• March 22: Trump orders $50 billion in tariffs against China
  • After alleging that the country had used unfair trading practices and had stolen intellectual property, Trump called for tariffs against China that would affect up to $60 billion worth of goods.

Major market catalysts: April

• April 1: China retaliates against US with $3 billion in tariffs
  • In response to Trump’s steel and aluminum tariffs, China responded by laying down $3 billion worth of tariffs on 128 different American goods, including wine, pork, metals and nuts.

• April 4: China adds additional $50 billion in tariffs against US
  • Less than 24 hours after the official list of Chinese goods that would be targeted by American tariffs was revealed, China went tit-for-tat with its own tariffs. This move seemingly targeted America’s signature exports, including soybeans, planes and cars.

• April 10: Stock markets encouraged by China’s president
  • Chinese president Xi Jinping offered some solace in brewing trade war fears, as he vowed to open China’s economy to further foreign investment while also reducing auto import tariffs. In response, the Dow picked up 428.9 points and the S&P 500 (INDEXSP:.INX) saw a 43.71-point boost.

• April 12: Gold falls from 11-week high after release of Fed minutes
  • Despite making impressive gains shortly beforehand, the precious metal’s price took a dip after the minutes were released from the Federal Open Market Committee’s March meeting. Investors saw some of the comments made as hawkish, especially those speaking about the federal funds rate being “slightly steeper” than previously expected. Gold fell to US$1,350.70.

Stay tuned for further updates! And if we missed a major market catalyst that you think should be included, please let us know in the comments.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.