Investing.com – Take a peek at the top 5 things that rocked U.S. markets this week.
Fed hiked rates and signaled additional rate hike
The Federal Reserve increased its key interest rate by 0.25% to a 1.00%-1.25% range on Wednesday, and confirmed that it would reduce its $4.5 trillion balance sheet later this year.
The central bank surprised investors, hinting at an additional rate hike this year, saying that it expected a tightening labour market will lift inflation to the bank's 2% target over the medium term.
Amazon announced $13.7 billion deal to buy Whole Foods
Amazon’s $13.7 billion deal to acquire Whole Foods sent shockwaves throughout the grocery sector amid fears that the deal gives Amazon a serious brick-and-mortar presence to compete with traditional companies in the sector such as Wall-Mart.
Analysts praised the deal, saying that it would likely energize demand from younger consumers such as Millennials, who have rejected traditional Big Food brands in favour of more authentic, trendy offerings.
Bitcoin and Ethereum made history
On Monday, prices of both bitcoin and Ethereum reached record highs of $3,000 and $419, respectively, as ‘cryptocurrency mania’ gripped investors.
Both cryptocurrencies struggled to remain at highs, however, as investors seemed to take profit on the recent rally, which has seen bitcoin and ethereum soar 200% and 5000%, respectively, since Jan 1.
Both cryptocurrencies have easily outperformed U.S. stock benchmarks such as S&P 500 index and NASDAQ in 2017, both are up about 13% and 6% year-to-date, respectively.
The ‘crude oil conundrum’ continued
Crude oil prices extended their losing streak to four weeks on Friday, amid growing investor skepticism in Opec and its allies’ ability to reduce the glut in the supply, after inventory updates pointed to a rise in global production.
A duo of inventory updates from both Opec and the International Energy Agency earlier in the week weighed on sentiment, after Opec said that output from the group rose by 336,000 barrels per day in May to 32.14m barrels per day while the International Energy Agency said production is likely to grow by 700,000 bpd this year.
Snap suffered its ‘crackle moment’
On Thursday, Snap Inc (NYSE:SNAP), the parent company of popular social media app Snapchat, closed at its IPO price of $17.00, as sentiment soured on the social media company amid growing concerns from Wall Street about the company's high valuation in the wake of its $2.2 billion loss in the first quarter.
Only about one third of Wall Street analysts have buy or overweight ratings, with 50% of analysts at hold or neutral and another 17 percent with sell or underweight ratings, according data from FactSet.
At Friday’s closing price of at $17.54, Snap is down about 40% from its high of $29.44 achieved on March 3.