Concerns about corporate and economic growth
US equities plunged in yesterday’s trading session, with the Dow slumping over 600 points and the Nasdaq falling into correction territory, on fresh concerns about corporate and economic growth.
Investors have been flocking to top-performing US equities markets this year, despite it being late in the cycle, drawn by strong economic growth and the boost to corporate America from President Trump’s package of tax cuts, as well as the index-leading performance of the technology giants.
However, stocks have been badly hit in October with industry commentators warning the equities sell-off earlier in the month could be the start of a more volatile period for markets in the face of a “toxic cocktail” of risks.
The last few days have seen another hammer-blow to shares, which have now erased this year’s gains, as disappointing forecasts from chipmakers and weak home sales data added to investor jitters yesterday.
The tech-heavy Nasdaq fell into correction territory, down 12.4% from its 29 August record closing high. It suffered its biggest one-day decline since August 2011 of 4.4% to 7,108, according to Reuters.
Shares in technology giants were pummelled, with Amazon dropping 5.9%, while Facebook and Apple fell 5.4% and 3.4% respectively.
Meanwhile, the Dow Jones Industrial Average dropped 608 points or 2.41% to 24,583.42, while the S&P 500 was down 84.59 points or 3% to 2,656.
The VIX or ‘Fear Index’ also rose 4.52 points to close at 25.23; its highest close since 12 February.
According to CNBC, the Dow has now dropped 7.1% in a volatile October, while the S&P 500 has fallen 8.9% and the Nasdaq has slumped 11.7%.
Asian stockmarkets have since been impacted by yesterday’s US sell-off, with the Nikkei 225 and Topix slumping 3.6% and 2.9%, respectively, while Hong Kong’s Hang Seng was down 2.1%.