“The market has had an incredible run”, said Michael O’Rourke, chief market strategist At JonesTrading In Greenwich, Connecticut.
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On Monday, the Dow declined 1,175 points, or 4.6%, to 24,346, while the S&P 500 fell 4.1% and the Nasdaq Composite 3.8%.
The index is now below 25,000 points for the first time since January 4, meaning the Dow has lost all of the points it gained throughout the first month of the year.
Fowler says people have forgotten what it’s like for a market to go down.
“Since last autumn, investors had been betting on the goldilocks economy – solid economic expansion, improving corporate earnings and stable inflation. It probably is programmed trading kicking in at this point”. Asian markets on Tuesday picked up the baton after a brutal day for USA stocks, with Japan’s Nikkei 225 index sliding almost 5%, and sharp losses across the region.
The benchmark S&P 500 and the Dow suffered their biggest percentage drops since August 2011 as a long-awaited pullback from record highs deepened.
The trigger for the sell-off was a sharp rise in United States bond yields following Friday’s data that showed U.S. wages increasing at the fastest pace since 2009, raising the alarm about higher inflation and with it potentially higher interest rates.
Stock markets were routed around the globe on Monday, with European indexes opening lower and bond yields rising as resurgent US inflation raised the possibility central banks would tighten policy more aggressively than had been expected.
The leading United States stock market index on Monday closed down 4.6 per cent at 24,345.75, BBC reported.
“The volatility index on the other hand exploded quickly and surpassed levels which we have not seen in years”.
That put it on pace for its largest loss in point terms – its biggest point loss until now was a 777-point drop in the global economic crisis of September 2008.
Singapore’s STI was down 2.7 percent. The S&P 500 and Nasdaq are down 0.92% and 1.51%, respectively in 2018. Add that to the recently enacted tax cuts that figure to boost the deficit and you have a recipe for a stagnant economy and the first bear market in nine years.
The latest plunge came as President Donald Trump has touted higher stock prices as one of his year-old administration’s major achievements.
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Oil prices settled lower, pressured by rising US output and other factors.
