On Monday, Wall Street stocks declined the most in the past six years pushing down most sectors during the same trading session following growing concerns of the inflation’s return which began last week. Broad-based equities began to descend downward last week due to expectations of interest rates going higher despite the returning inflation.
As investors moved back to safe haven assets such as gold or bonds, most stocks declined on Monday resulting in a massive sell-off that affected the European and Asian market as well.
The Dow Jones Industrial Average was down by as much as 1,175.21 points to close at 24,454.75 and has lost around 1,500 points at some point during Monday’s trading session. The index with 30 stocks was almost trading flat during the previous session.
Aside from the Dow Jones, other indexes such as the S&P 500 slipped by 4.1% to 2,648.94 which is its biggest plunge since August 2011 when the United States lost its triple-A credit rating. The Nasdaq Composite index also lost 3.8% at 6,967.
EU and Asian Market Decline
On Monday, the FTSE 100 lost 255 points and was down by more than 3% to 7,079.41 due to the massive selloff in U.S. stocks that affected the European and Asian market before the index recovered up by 1.9% to 7,196.
Asian stocks also lost its ground due to the decline of Wall Street stocks with the global market on a panic due to concerns of interest rates and cash in profits in the United States.
By Wednesday, Asian shares have reversed its previous movement following the move of most U.S. investors to safe-haven assets due to expectations of a jittery market head of the week.
U.S. stocks rallied and recovered from its previous plunge to rally to a fifteen-month high during the most previous trading session as investors went back to the sectors who recently suffered the most.
Shares of stocks from the consumer, material, and technology sector logged a gain of around 1.7% on the S&P 500 index while the Dow Jones Industrial Average gained 567 points which are its biggest rally in two years.
Currently, the market is observing the direction of the economic growth across the globe as well as the wages data in the United States which would possibly be affected by the possibility of a policy tightening program from the U.S. Federal Reserve as well as the European Central Bank.
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