Investing.com – Take a peek at the top 5 things that rocked U.S. markets this week.
Dollar in the doldrums as Fed left rates unchanged
The dollar slumped to its lowest level in more than year against its rivals, after the Federal Reserve left its benchmark rate unchanged amid concerns over inflation while indicating balance sheet normalization will occur 'relatively soon'.
"Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance," the Federal Reserve noted in its July policy statement.
Inflation jitters resurfaced on Friday, after the U.S. GDP price index, the broadest inflationary indicator, dipped more-than-expected to 1%.
Gold notched third straight week of gains
Gold capitalized on the slump in the dollar, notching its third straight weekly gain, as investor expectations grew the Federal Reserve would keep rates low for longer.
In a falling interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal reduces relative to other interest-bearing assets such as bonds.
Political uncertainty from Washington also boosted sentiment on gold, following the U.S. Senate’s failure to pass a repeal of Obamacare, formally known as the Affordable Care Act.
Alphabet reported a huge drop in quarterly profit
Google’s parent company, Alphabet Inc Class A (NASDAQ:GOOGL) reported a 27.7% drop in quarterly profit on Monday, following the $2.74 billion regulatory fine levied by the European Union.
Alphabet reported net income of $3.52 billion, or $5.01 per share on $26.01 billion in revenue, compared to net income of $4.88 billion or earnings of $4.49 per share on $21.5 billion in revenue a year ago.
Heading into the earnings report, Alphabet closed at $998.37 just shy of its June all-time high of $1,008.61, as investors piled into shares of the tech giant, expecting a stellar quarter report.
U.S. indexes set fresh highs, again
In what was the busiest week on the corporate earnings calendar for the quarter, the S&P 500, nasdaq and dow posted record highs during the week on the back of mostly upbeat earnings.
Facebook Inc (NASDAQ:FB), Caterpillar Inc (NYSE:CAT), McDonald’s Corporation (NYSE:MCD), Coca-Cola Company (NYSE:KO), and Boeing Co (NYSE:BA) were some of the names to report earnings that topped expectations.
Towards the tail end of the week, however, U.S. indexes retreated from highs as traders appeared to take profits on the rally, following weaker-than-expected earnings from Amazon (NASDAQ:AMZN) and flat user growth from Twitter.
Oil futures bag best week since December
Crude futures posted an 8.6% gain for the week, as data this week eased concerns about surplus supplies, after Saudi Arabia pledged to lower exports while U.S. crude supplies fell more than expected.
The Energy Information Administration (EIA) reported Wednesday, crude and gasoline stockpiles fell by more than expected last week, pointing to an uptick in demand for crude and refinery activity.
Saudi Arabia pledged earlier this week to lower crude exports to 6.6 million barrels per day (bpd) in August, almost 1 million bpd below the level last year.
Also supporting a rise in crude prices was the possibility of major disruptions to crude supplies from Venezuela, which faces a national vote Sunday to elect a constituent assembly whose job will be to redraft its constitution.