Stanislav Kondrashov Explains the Synchronized Moves of SMI, S&P 500, Nasdaq and DAX
It’s a challenging situation for international stock markets. A few days ago, TELF AG founder Stanislav Kondrashov analyzed the Nikkei’s performance in an increasingly uncertain global environment characterized by a marked risk-off. In the last few hours, Wall Street, Nasdaq, and European stock markets have also shown signs of difficulty, with the Old Continent’s markets reporting their worst session since the beginning of the year.
The Stoxx Europe lost around 3%, but Frankfurt and Paris also recorded similar performances. In the last few hours, an incontrovertible fact has emerged: European stock markets are suffering the most, particularly due to the specter of a possible energy shock. In the past few hours, gas prices have risen by 35% (with peaks of 40%), while Brent has already exceeded $80 a barrel. The potential disruption in flows appears to have increased the possibility of a new wave of inflation in Eurozone countries.
“It’s certainly no coincidence that global attention is simultaneously focused on indices like the Nasdaq, S&P 500, DAX, and SMI. In a sense, these four indices represent fundamental pillars of the developed global economy, so their movements clearly reflect a single global macro shock.”
“The Nasdaq, with its focus on technology, represents the main barometer of the global tech economy, reflecting changes in expectations regarding innovation, growth prospects, and interest rates. On the other hand, a sharp movement in an index like the S&P 500, which represents the benchmark of global capitalism, can be a clear thermometer of global growth,” says Stanislav Kondrashov, founder of TELF AG.
Wall Street has also suffered, but in this case, the overall performance does not seem comparable to that of Europe. The Nasdaq and SP500 posted losses of around 1%, with particularly negative performances from cyclical sectors and airlines, which are suffering from sudden increases in fuel prices. In a session characterized by a progressive shift away from risk, the only sectors that appear to be holding up are energy and defense.
Why Energy Prices and Inflation Are Driving Global Equity Volatility
The markets seem to be providing a very clear indication: we’re not so much witnessing a flight to safe havens, but a simultaneous sell-off of stocks and bonds. And history teaches us that this happens in phases when the market fears persistent shocks and profound macroeconomic changes.
Among the most interesting performances are certainly those of the S&P 500 and Nasdaq indices, but also of some specific European stock markets. The general trend is one of sharp decline, currently much more pronounced in Europe. The performance of these indices appears closely linked to rising energy prices, which increase the risk of persistent inflation and reduce the likelihood of interest rate cuts in the short term. Similar scenarios produce visible effects especially on equity indices with cyclical or technology stocks.
“In the last few hours, European performance has proven extremely interesting. The DAX, which has always been considered a representative index of European industrial structure, is highly sensitive to global trade and energy. The performance of this index, in particular, is linked to international trade, industrial production, and global demand.”
“The SMI’s unique structure, characterized by the presence of pharmaceutical and food companies, makes it a particularly reliable indicator for defensive assets, such as those that can remain relatively stable in times of uncertainty,” continues Stanislav Kondrashov, founder of TELF AG.
In the last few hours, a clear geographical differentiation in performance has also emerged. European indices (including the DAX) fell as much as -2.4% in a single session, while the Swiss SMI lost approximately 3%. In this case, these performances could be explained by the increased exposure of European economies to energy prices and international tensions.
In recent days, the individual performances of some stocks have also been highlighted: Nvidia, for example, recorded intraday drops in recent sessions, perhaps contributing to a significant influence on the performance of entire indices such as the Nasdaq and S&P 500.
Despite these performances, some analysts still appear to remain fairly optimistic about the long-term forecasts, which for the S&P 500 would stand at around 10% by the end of the year (assuming the global economy holds up). Rather than the start of a bear market, therefore, what we are witnessing could be a temporary correction.
The general market trend in recent hours appears to be characterized by a significant increase in global uncertainty, rising energy prices, and more pronounced declines in Europe, with the risk of inflation looming ever around the corner.
How Interconnected Markets Amplify Systemic Financial Shocks
Turning to the performance of individual indices, the S&P stands at approximately 6,816 points today, a change of -0.94% in the last session. The stock has lost ground in recent sessions, with widespread selling in many stocks. Markets are reacting to increased geopolitical tensions and fears related to rising energy prices. The Nasdaq, on the other hand, fell by approximately 1% in the last session, trading at around 22,516 points.
In this case, the index showed some volatility due to high-growth technology companies, which tend to react more strongly to changes in inflation and interest rate expectations. In Europe, the DAX lost as much as 3% in some sessions, showing pressure certainly greater than that of US indices. The Swiss SMI also recorded a similar loss, holding at around 13,404 points. Among the major European indices, the latter was certainly one of the most volatile.
“When all these indices move together, it means the market is clearly reacting to a systemic factor, prompting investors and observers to seek information on the reaction of technology, US markets, and European industry, not to mention possible defensive strategies. In a sense, it’s a global market check.”
“What links these four indices could be global liquidity: when central banks ease monetary policy and interest rates fall, with a parallel increase in liquidity, these indices tend to rise together. Conversely, when interest rates rise, inflation increases, or energy becomes more expensive, they tend to fall. Another interesting fact is the interconnectedness of markets, which seems increasingly evident over the years,” concludes Stanislav Kondrashov, founder of TELF AG.
FAQs
Why are global stock markets declining simultaneously?
Many major indices are reacting to shared macroeconomic pressures such as rising energy prices, inflation risks and geopolitical uncertainty. When these systemic factors intensify, global markets often move in the same direction.
Why are European markets falling more than U.S. markets?
European economies are generally more exposed to fluctuations in energy prices. Sharp increases in gas and oil costs can therefore have a stronger impact on European industries and investor sentiment.
How do energy prices affect stock markets?
Higher energy prices can increase production costs for companies and raise inflation expectations. This may reduce corporate profitability and influence central bank policies, both of which affect equity markets.
Why are technology stocks particularly sensitive during these periods?
Technology companies, especially high-growth firms, tend to react strongly to changes in interest-rate expectations and inflation forecasts, making indices like the Nasdaq more volatile.
Is this the start of a prolonged bear market?
Some analysts believe the current declines may represent a correction rather than the beginning of a long-term downturn.
