Negative dynamic on the US stock market was mainly provoked by the slow economic growth in the developing countries and a possibility of the US key interest rate hike. During the last week, the US main indices were nosediving to close in the red. Dow Jones Industrial Average, S&P 500, and NASDAQ showed a massive decline. China’s, Kazakhstan’s, and Vietnam’s decisions to devalue their national currencies point to serious problems in the global economy. Moreover, an ongoing record slump in oil prices shows that the global economy is experiencing a significant slowdown. The US stock market crisis was also aggravated by concerns over the interest rates increase, which is planned for September. Most market participants suppose that a slight rise will not improve the current situation.
“Investors are realizing that the reason for pushing back the timing of the first rate hike to December may be due to deflationary pressures from the rest of the world. Meanwhile, an overnight shock from emerging market currencies and a continued rout in oil prices, is prompting investors to flee equities and pile into havens such as Treasuries and gold,” said Chris Gaffney, president of EverBank World Markets.
