Stocks suffered their biggest one-day pull-back in three months on Thursday as traders grew concerned about the number of coronavirus cases increasing in some states that are reopening up from lockdowns. Shares that have surged recently on hopes for a smooth reopening of the economy led the declines. The Dow Jones Industrial Average plunged 1,861.82 points, or 6.9%, to close at 25,128.17.
Global stock markets staged a strong rally on Tuesday as investors were buoyed by the Federal Reserve’s efforts to boost the US economy and the prospect of Congress backing a fiscal stimulus package. The rally on US and European markets followed gains in Asia overnight in the wake of the US central bank’s move on Monday to launch an unlimited money-printing program.
Stocks in Asia dropped on Thursday following a Wall Street sell-off overnight. Tokyo stocks fell more than 3% while the slump in Europe was less severe. Tesla shares increased more than 12% on a surprise third-quarter profit. The increase gave investors hope after an unsteady period. CEO Elon Musk called it an ‘incredibly historic quarter.’
United States stocks experienced their worst fall in over six years, Monday, as the Dow plunged nearly 1,600 points, the biggest trading day point decline in history. The White House tried to reassure investors, highlighting its focus on ‘long-term economic fundamentals, which remain exceptionally strong.’ Analysts say the turbulence is due to rising wages.
Global stock benchmarks and commodity prices fell on Tuesday following President Trump’s Chinese tariff announcement which escalated the possibility of a trade war. Stock markets in both Europe and Asia fell after the announcement with fears that increased tensions may lead to an international trade war. The market reactions reflect the disruption in global trade.
Following the biggest one-day selloff in six years, Wall Street saw a rebound Tuesday, indicating the likelihood of increased volatility in the coming days. While there was a rebound of roughly 2 percent in US stocks, Tuesday, Asian equities began the day with a strong pickup, cooling by the middle of the day.
Japanese stocks plunged Tuesday and other Asian markets declined following heavy Wall Street losses triggered by President Trump’s attack on the U.S. central bank. Wall Street indexes fell more than 2 percent Monday after Mr. Trump tweeted that the Federal Reserve Board was the U.S. economy’s “only problem.”
Markets continued to drop on Tuesday amid losses in technology shares and continuing declines in oil prices. A recent technology selloff crossed into other sectors contributing to the volatile stock market. Asian markets also dropped on Wednesday as a result of a trade dispute between the US and China which stalled planned weekend meetings.
The Dow Jones saw its second biggest drop in history, Thursday, following the drop this past Monday, technically putting the market in correction territory. The drop was likely influenced by the fear that central banks will increase interest rates. If the Dow drops another 214 points Friday, it will be the worst week recorded in history.