The Dow continues to plummet today. Most recently, it dropped more than 600 points, nearing a drop of 29,000 following the United States said its gross domestic product (GDP) has contracted for two consecutive quarters. This indicates that the US economy has entered a technical recession.
As of 9:20 p.m. GMT, the Dow Jones Industrial Average was 29,079.53, down 604.21, or 2.04%, while the S&P 500 is down 2.56% and the Nasdaq is down 3.3%.
The Dow has entered a bear market following falling more than 20 percent from its record high in January.
In addition, the Dow is down 7% from the beginning of September. The S&P 500 and Nasdaq were down 7.5% and 8.4%, respectively.
According to the CFRA Research Institute, statistics indicate that September was Wall Street’s worst month of the year.
In addition, the CFRA pointed out that this year, which is the year of midterm elections in the United States, Will make the Wall Street stock market more likely to fall in September. This is because investors tend to sell heavily in September and October in the election year. before returning to buy shares in the 4th quarter
All stocks in the market are down today. led by real estate stocks Because it is a group that has been heavily affected by the Federal Reserve’s (Fed) interest rate hike.
The CBOE Volatility Index (VIX), a measure of investor anxieties in the US stock market, rose 10.40 percent to 33.32 points today.
Apple shares fell more than 4 percent following media reports it had canceled plans to increase production of the iPhone 14 due to lower-than-expected market demand.
The Commerce Department released its final estimate for second-quarter gross domestic product (GDP) today, saying the US economy contracted 0.6% in the quarter. It was unchanged from the second estimate, while the first estimate showed the economy contracted 0.9%.
Earlier, the US Department of Commerce said The US economy contracted 1.6% in the first quarter.
The economy contracted for 2 consecutive quarters. put the US into a technical recession.
Fed Chairman Jerome Powell said earlier that Fed Fed’s Mission to Control Inflation May affect the economic growth of the United States. And he won’t consider a rate cut until he’s confident that inflation figures fall toward the Fed’s target of 2%.
The market is also pressured by the return of the dollar. and the rebound in US government bond yields today.
The Dow jumped more than 500 points yesterday, bolstered by the dollar’s depreciation. and the decline in US government bond yields After the Bank of England (BoE) announced an unlimited purchase of government bonds to stabilize the market.
However, today’s return to the dollar has raised investors’ fears that it will hurt the bottom line of listed companies with foreign earnings. The rebound in US 10-year bond yields used as a reference for global bond prices. This includes the interest rate on the mortgage loan. causing investors to worry regarding the cost of debt repayment of listed companies
In addition, investors were worried that today’s strong labor market data release would be a boost to the Fed’s accelerating interest rate hikes.
The Labor Department reported that initial claims for unemployment benefits fell 16,000 to 193,000 last week. which is the lowest level since April and the analysts are expected to increase to 213,000.
The number of claims for unemployment benefits is below 215,000, the weekly average for the pre-COVID-19 pandemic in the United States.
Meanwhile, the US Department of Labor reported that The number of Americans who continued to claim unemployment benefits fell 29,000 to 1.35 million.
