US stock market down: Why S&P 500, Dow, and Nasdaq fell
The US stock market fell sharply. The S&P 500 dropped 1.66% to 6,737.49, the Nasdaq fell 2.29% to 22,870.36, S&P 500 and the Dow Jones lost 1.65% to 47,457.22. US Stock markets lose $1.5 Trillion in 48 hours. This downfall in the US stock market recorded their largest single-day losses in over a month.
Reasons Behind Stock Market Falling
There are multiple factors behind this decline. One reason was the reassessment about the slower interest rate cuts by the Federal Reserve. Earlier this year, the Federal Reserve reduced interest rates two times to help support the US economy. Recently, the US government shutdown ended after 43 days, but it caused disruption in economic data flow and created political instability and uncertainty among investors.
As inflation is still high in the United States and the job market remain strong, the Fed are not rushing to cut rates again. Rising inflation reduces the purchasing power of consumers, and any decision taken too quickly can slow business growth, affect corporate profits, and cause problems in the economy that can lead investors to sell.
High-profile technology stocks also lost value in this decline. Nvidia, the world’s most valuable company, fell 3.6%, Tesla dropped 6.6%, and Broadcom went down 4.3% in this decline. Top performance and excitement about artificial intelligence made investors sell some of their holdings, as they decided it was a perfect time to take profits, which also contributed to the overall drop in the stock market. Disney’s shares also dropped 7.8%, and the stock price fell, but Cisco was an exception, and its stock went up 4.6% because the company gave a positive profit forecast.
When uncertainty rises, investors often move money to safer options like gold or stable currencies. Although the US government shutdown affected gold prices, the demand for gold remained strong at around $4,200 per ounce and the U.S. Dollar Index slipped slightly toward 99, even as demand for stocks fell.
