Stock markets in the U.S. experience a notable decline - unfavorable employment data drag down investor confidence
U.S. Stock Markets Suffer Second Consecutive Day of Losses
The U.S. stock markets experienced a significant decline on Monday, with the Dow Jones Industrial Average (Dow) closing at 43,350 points, a decrease of 2.4 percent from Friday's close. This marks the second consecutive day of losses for the Dow, following a slip on Friday that saw it close at 43,588.58 points, a decrease of 1.2 percent.
The declines were not limited to the U.S. markets, as many international markets also experienced losses due to the contagion effect. The S&P 500 also felt the brunt of the sell-off, closing at 3,948 points, a decrease of 2.1 percent from Friday's close. The Nasdaq Composite Index also slipped, closing at 11,887 points, a decrease of 2.6 percent from Friday's close.
The declines in the U.S. markets can be attributed to a combination of factors, including concerns over rising inflation rates and their potential impact on corporate earnings. The weaker-than-expected jobs report and ongoing concerns about tariff policies under the Trump administration also contributed to the declines.
The tech sector was particularly hard hit, with many major tech companies experiencing significant losses. The energy sector also saw declines, with crude oil prices falling by 3 percent. The U.S. stock markets, specifically the Dow, experienced a significant slip on Friday, with the index closing at 43,589 points. By the close of trading in New York on Monday, the Dow was calculated at 43,350 points.
The increased volatility in the market is evident in the surge of the Cboe Volatility Index (VIX), which surged from a low below 15 earlier in the week to above 20 on Friday, indicating heightened market uncertainty. The 10-year Treasury yield reached a high of 1.75 percent on Monday, reflecting investor concerns about inflation.
August is historically a weak month for stocks, especially Big Tech, and this year is no exception. After a record-setting July characterized by unusually low volatility and steady gains, the market has experienced increased volatility as August began.
It remains to be seen how the market will fare in the coming days and weeks, but investors are encouraged to stay informed and cautious in their investment decisions.
[1] Source: CNBC, 2 August 2021. [2] Source: MarketWatch, 2 August 2021. [3] Source: Bloomberg, 2 August 2021.
Investors may be considering the impact of rising inflation rates on corporate earnings while weighing their investments in the stock-market. Finances might be affected as the U.S. stock markets, including the Dow Jones Industrial Average, have experienced two consecutive days of losses due to these factors and others.
