US stock markets experienced a mini pullback on Monday, reflecting a cautious sentiment in the wake of President Trump’s proposed plan to impose a $100,000 fee for new H-1B visa applications. Companies such as Amazon and Microsoft, which heavily rely on these visas to attract foreign talent, saw their stock prices decline amid concerns that the increased costs could hinder their ability to maintain productivity.
Market analysts suggest that while the tech giants may be able to absorb the costs associated with the visa fee, the current dip in tech shares could be temporary. They draw parallels to previous instances where tariff concerns initially pressured stock prices before stabilizing.
Overall, the tone in the markets is risk-off, with stocks slightly down in both European and U.S. markets as they pull back from post-Fed highs reached the previous week. In contrast, the bond market is showing signs of strength, with bond yields in the UK falling across the curve. This indicates a lack of immediate concern from investors regarding the UK’s borrowing practices.
In commodities, gold prices surged to an all-time high at the beginning of the week, surpassing $3,700 per ounce. Year-to-date, gold has risen 41%, outperforming other asset classes like stocks. This positive trend contrasts sharply with the cryptocurrency market, which has faced significant declines; Bitcoin fell by over $3,000 and Ethereum also dipped as investors pulled back approximately $1.5 billion in bullish bets.
Interestingly, while gold and cryptocurrencies had previously mirrored each other’s movements, this divergence could signal a shift in investor sentiment towards traditional safe-haven assets amid uncertainty surrounding riskier assets like cryptocurrencies. In the UK, the FTSE 100’s gains were bolstered by mining shares, particularly in companies like Endeavour, Fresnillo, Glencore, and Rio Tinto, benefiting from the spike in gold prices. Conversely, MicroStrategy, a major bitcoin treasury firm, saw its stock drop over 4% as the company continues to navigate the volatile crypto landscape. Despite the downturn, MicroStrategy remains optimistic, seizing the opportunity to bolster its holdings by acquiring an additional 850 BTC for around $99.7 million, bringing its total to 639,000 BTC, valued at roughly $72 billion.
In another significant development, the U.S. has extended a lifeline to Argentina amid rising political and economic turbulence that has adversely affected the country’s bond market and currency. The Argentine peso has depreciated by 5% against the dollar this month, and the yield on the country’s 10-year bonds increased by 150 basis points over the past week. U.S. Treasury Secretary has indicated that all support options for Argentina, a “systemically important ally,” are being considered. Possible interventions include swap lines and direct purchases of dollar-denominated Argentine debt. This U.S. backing appears to be contingent on the newly elected President Milei’s efforts to implement conservative fiscal reforms. The immediate market reaction suggests that this support has provided some stabilization, evidenced by a 37-basis point drop in 10-year yields and a 2% rise in the Argentine peso on Monday.
As the week unfolds, markets remain attentive to the developments in both the tech sector and global financial dynamics, particularly regarding Argentina’s economic situation and potential ripple effects across international markets.
