At the start of August, Wall Street endured its worst day in the last two decades.
The US’s top market indexes went volatile as the trading began on Monday, August 5th
The S&P dropped 3%, its biggest fall since September 2022, at 5,186.33.
The Dow lost over 1,000 points and the Nasdaq ended down 3.4% at 16,200.08 (The Guardian).
Japan’s Nikkei 225 plunged 12.4%, experiencing its worst day since 1987’s Black Monday crash.
The fall followed reports of high unemployment in the US and the Federal Reserve’s decision to hold interest rates.
In June, unemployment in the US increased to 4.3%, reaching its highest peak since October 2021.
Unrest also came from skepticism around Wall Street’s focus on AI tech and the profit growth it will realistically generate.
The popularity of AI contributed to many Big Tech stocks to boost the S&P 500 to multiple all-time highs this year, even as high rates weighed on other areas of the market.
However, the famous bundle of stocks called the “Magnificent Seven” slowed in June as investors were accused of elevating their prices too high (CTV News).
A resounding lack of confidence in the US economy combined with the pressure of inflation generated widespread fear of recession, triggering a global stock market sell-off.
In only two days, Wall Street recovered, seeing its best day in almost 2 years as a result of a recovery rally.
The S&P 500 rose 2.3% to 5,319.32, its highest one-day jump since November 2022. The Dow increased by 1.8% to 39,446.49 and the Nasdaq Composite rose 2.9% to 16,660.0 (The Guardian).
While this appears promising, the market will likely remain volatile.
Managing your investment portfolio and the dynamic nature of the stock market can feel foreboding.
The support of a financial advisor can simplify the process and empower your decision-making processes.
