Three reasons for the sell-off in stock markets

Three reasons for the sell-off in stock markets

The sell-off in stock market shocked market participants. On Wednesday, DJI fell by 2.4%, SP500 lost 3%, while Nasdaq fell by 4.4% (it had the largest drop since 2011) within one trading session.

As it was earlier this month, the most vulnerable are high-tech companies, which have been actively pulling the market up for the last two years.

There are three main reasons:

  • Some investors fear the rate of revenue growth will decline in the coming quarters, not justifying stock prices, overvalued by historical standards (based on multipliers).
  • The import tariffs introduced by the US during previous six months having significant negative impact on businesses that note growth of inflationary pressure, unpredictability of revenue outside the USA due to currency fluctuations.
  • At the same time, the adrenaline effect experienced by US economy from tax incentives is fading.

Formally, the US economy is growing faster than the most of its peers. Nevertheless, investors’ expectations were so high that return to the mean causes a strong drops in stock prices.

If there is no evidence of a significant slowdown in economic growth, the most severely fallen stocks may soon regain their buyers. However, there are still high chances of correction in the near future.

The information in this text is provided to you for informational purposes only and should not be regarded as an offer or solicitation of an offer to buy or sell any investments or related services that may be referenced here.

下篇文章
由专业人士创建。 为专业人士。
privacy protect
最近的代表办事处:  EXANTE.
1前街,伦敦
EC2Y 9DT
英格兰, +356 2015 0000
版本 0.4.122
试试EXANTE网络平台

按真实报价进行演示交易。无需注册。没有附加条件。立即试试它吧!

我们只使用对我们的网站和服务功能至关重要的cookie。我们绝不将您的个人数据转交给广告公司。您可以随时撤回您的同意