Trading results for 31 January 2025

The past week was tense, adding significant uncertainty for investors. It began last Monday when DeepSeek hit the market, triggering a major sell-off among the seemingly strong and unshakable ranks of leading tech stocks. From then on, market confidence wavered, volatility surged, and indexes swung back and forth. But that was not all. Midweek, Federal Reserve Chair Jerome Powell put in his two cents of uncertainty. His press conference after the U.S. Federal Reserve’s FOMC meeting failed to sway market sentiment, leaving more questions than answers.

Finally, on Friday, Donald Trump further clouded the outlook by imposing higher tariffs on Mexico and Canada, completely souring investor sentiment. As a result, all major U.S. indexes declined and ended the week in negative territory. The losses, fortunately, were not too severe, but confidence in further growth dissipated like morning mist.

So how did the week end? Only the Dow Jones (DJIA-30) managed to close the week in the green, posting a modest 0.27% gain. In contrast, its two peers, the broad market S&P 500 and the tech-heavy NASDAQ Composite, fell 1.00% and 1.67% respectively. The main driver of the decline in both indexes was the sell-off in leading AI-related tech companies. The sector’s undisputed leader, Nvidia (NVDA, -3.67%), lost nearly $0.5 trillion in market value over the week – staggering figures.

Indexes in the ITS family saw mixed results. The Islamic securities index ITS Shariah (ITSS) struggled with the same challenges as its U.S. counterparts. Uncertainty among investors in AI-driven tech stocks pushed the index down 1.97% for the week. This outcome was expected, as the negative sentiment surrounding major U.S. tech firms dragged down indexes across the board, including ITSS.

Meanwhile, the global market index ITS World (ITSW), benefiting from its exposure to European and Asian stocks, performed much better. It even set multiple new all-time highs throughout the week. However, Friday’s sell-off affected ITSW as well, slightly denting its gains. Still, it emerged as the best-performing index of the week, rising 0.93%.

One clear sign of heightened investor anxiety was the sharp increase in trading volume. This trend was evident across both the U.S. market and ITS, where daily turnover surpassed $83 million on one of the trading days. The total weekly turnover on ITS exceeded $250 million.

The market remains unstable, with significant volatility likely in the near term. These fluctuations could eventually lead to a correction, bringing further market adjustments in the coming weeks.