New York – The United States (US) stock market experienced its worst fall in six years, sparking a sell off, as concerns grew in the increase of higher interest rates.
The Dow Jones Industrial Index dropped to 1,175 points , 4,6% down 24, 345.75. After record highs in the stock market, investors have pulled off after changes by forecasters of the American economy to lower number, with possible changes in the cost of borrowing. The sell off began on Friday after the US Labour Department released higher than expected growth numbers in wages.
CMC Markets analyst Michael McCarthy said the wage numbers “blew lower interest rates out of the water”. Investors responded by moving their stocks and assets into the bond market, which can benefit from higher interest rates. “This isn’t a collapse of the economy.
This isn’t a concern that markets aren’t going to do well,” said Erin Gibbs, portfolio manager for S&P Global Market Intelligence. Economic analyst have predicated that the markets will become more unstable in the next coming months.
President Trump has boasted about the high numbers in the stock markets, tweeting multiple times of the record breaking stock trading is a sign of a strong economy under his administration and policies.
The stock market had been trading in record high numbers,it is seen by some as signs that the US economy is showing signs of growth.
Analyst are not panicking as yet, as markets need to deteriorate further for any panic to be legitimate.
Photo Credit- NY Mag
Leave a Reply