Recent market volatility has seen volatility-linked funds start reducing their equity exposure, and analysts expect further escalation in the market VIX index could prompt these funds to sell an estimated $45 billion worth of stocks. While the selling so far has been relatively modest, a jump in volatility could also trigger selling from slower-moving strategies like commodity trading advisors. The ongoing earnings season and economic data releases will be closely watched as potential triggers for increased market volatility, as the market is currently 4.5% down from its peak.


April selloff in stocks deepened as investors abandoned early interest rate cut prospects, noting their fourth straight bearish session. However, some individual stocks diverged from the trend - United Airlines surged 17%, while rival airlines American and Southwest also gained. Then again, the worst performer in the S&P 500 was J.B. Hunt Transport Services, falling 8% following weak earnings. Analysts believe the current market pullback could present a buying opportunity, especially if upcoming data shows a moderation in inflation.


Gold prices have been volatile, regaining some of their losses on Wednesday after the dollar gapped down from its highs. In other metals, the Silver Institute Industry Association has forecast a 17% rise in the global silver deficit in 2024, potentially increasing demand and creating more upside for the precious metals complex.


Oil prices were steady after losing 3% as the market weighed in higher U.S. crude inventories against the easing of tensions between Israel and Iran. Analysts highlighted that the latest bout of risk premium from the conflict has now been eroded, with Brent prices returning to levels seen before the April 1 attack on an Iranian consulate. In other news, the Biden administration may reimpose oil sanctions on Venezuela based on its actions regarding its upcoming elections..


Asian currencies saw some relief as the U.S. dollar retreated from multi-month highs, but concerns over higher U.S. interest rates continue to weigh on the region. The Japanese yen briefly recovered after G7 finance leaders reaffirmed their stance against excessive currency volatility, while the Chinese yuan remained under pressure from economic uncertainty and outflows.