CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Dow Jones drops after weak earnings reports

Wall Street is down after disappointing earnings reports from Caterpillar and Nvidia.

The Dow Jones has fallen by as much as 200 points after a disappointing earnings report from Caterpillar.

Why is the Dow Jones down?

Wall Street is concerned about the negative earnings reports from construction equipment maker Caterpillar and the chipmaker Nvidia. Both companies attributed losses to declining sales and production in China. The economic slowdown in China is affecting the revenues of many US companies. Quincy Krosby, Prudential Financial chief market strategist, said that companies blaming poor earnings reports on China is a valid reason for concern in the US markets.

‘The one thing with China is it's not a made-up story. It's not like companies are blaming just the Fed or the weather. As we go through the week, if this becomes a theme in many different sectors, it's going to lend urgency to the idea that the global economy is slowing and the need for more stimulus,’ said Krosby.

How did the US government shutdown affect Wall Street?

In addition to economic woes overseas, the US financial state was in disarray during the month-long government shutdown. US President, Donald Trump, and Congress agreed to re-open the government until February 15. The Congressional Budget Office (CBO) reports that $11 billion was lost and economic growth decreased 0.13% because of the gridlock in Washington, D.C. Wells Fargo analysts wrote in a note that another stoppage in three weeks could have a worse impact on the gross domestic product[GDP] of the US.

‘If another extended partial government shutdown should take place after February 15, the direct hit to real GDP growth for the quarter would once again start rising,’ wrote Wells Fargo.

Wall Street hopes that earnings reports this week from Facebook and Amazon will lift up the US stock market.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Take a position on indices

Deal on the world’s major stock indices today.

  • Trade the lowest Wall Street spreads on the market
  • 1-point spread on the FTSE 100 and Germany 30
  • The only provider to offer 24-hour pricing

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.