US stocks extend losses

The US Central Bank’s eagerness to raise rates continues to drive major stock market sell-off

US STOCKS

On Wednesday, the Dow Jones fell by 832 points, plunging the index below 26,000 representing a 3% decline – the third worst point decline in its history. The S&P 500 fell by 3.3%, while the Nasdaq slid by more than 4%, its biggest one-day loss for two years. All 30 companies that comprise the Dow were down at market close.

Today, US equity markets have opened slightly lower. The S&P 500 opened at 2785.68, down 3.29%, while the Dow slid marginally at market open, hovering around 25466.

The October decline that US stocks have endured is fuelled by investors fearing further interest rate hikes. The US Central Bank has raised rates three times this year already, with many expecting the Fed to increase rates once more before the end of the year.

The market sell-off being witnessed in the US is spreading to Europe, with the FTSE 100 is trading in correction territory, 10% below its recent high, extending losses to an 8-month low.

Home builders in the UK were among the hardest hit with Barratt Developments BDEV falling 8% and Taylor Wimpey TLW sliding 3.2%.

Elsewhere, the Nikkei was down 3.4% at market close, while the Shanghai Composite lost the gains it had made in late-September, down 5.2% at close – representing the sharpest fall the index has seen since February 2016.

 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IG Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by writer