Monday's trading was a tough day for investors as major U.S. stock indexes fell sharply, hitting their lowest levels in several months.
The S&P 500 and Nasdaq Composite ended the day at their lowest points since early May, while the Dow Jones Industrial Average closed at its weakest level since mid-June. The widespread selloff was driven by a mix of economic worries and disappointing news from companies.
The S&P 500 dropped 3%, its largest decline since September 2022. The Nasdaq Composite fell 3.4%, its biggest drop since late July, and the Dow Jones fell 2.6%, marking its steepest drop since September 2022. The Dow's 1,033-point drop was its largest point loss in over a year.
According to Forbes, the fear among investors was clear from the CBOE Volatility Index (VIX), which surged to its highest level since October 2020, reflecting increased anxiety about future market conditions.
The main concern Monday was the fallout from investors unwinding risky trades that involved borrowing money in Japan to buy stocks elsewhere. Japan's recent shift away from its low-interest-rate policy has disrupted these trades, adding to market jitters.
The Nasdaq is now down 13.1% from its peak in early July, falling deeper into correction territory. The Dow and S&P 500 are also down but not as severely, with the Dow off 6.1% and the S&P 500 down 8.5% from their highs in July.
Other factors contributing to the market decline include global currency fluctuations, uncertainties about central banks' actions, rising tensions in the Middle East, and the unsettled U.S. presidential election cycle, CNN reported.
On Monday alone, the S&P 500 companies lost a combined $3.5 trillion in market value.
Looking ahead, the market needs some clear positive signals to turn things around. This could include more stability in global currencies, better earnings reports from companies, and encouraging economic data. For now, investors are waiting for signs that the market will stabilize after this turbulent period.
