Wall Street stocks started slightly up on Tuesday, meaning that the market is back to relatively normalcy after several days of volatility. The Nasdaq, dominated by tech companies, and the Dow Jones Industrial Average and S&P 500 rising in the earlier trading sessions relieved the volatile market.
This came after the UK and European markets fell, with London’s FTSE 100 in positive territory but later declining. Globally, the Nikkei 225 index of Japan posted a stunning recovery, a 10. This was a sharp reversal, with the index almost touching the day’s low of 11,343 after spiking 23% or 3,217 points from the previous day’s catastrophic decline.
The initial drop of 12% of the nikkei gave a clear indication to the global stock markets and thus triggered the drop in the share price of various stocks that trade in the UK, Europe, and US markets. Market unease over a possible slowdown of the US economy and a lone rate hike in Japan have also contributed to the volatile market seen in the above chart.
However, some analysts have recently argued that it is unwise to talk about the world’s largest economy entering a recession period, having witnessed recent fluctuations. The experiences America goes through economically and financially are not America alone; the global economy it affects: Economist Mohamed El-Erian adds that a US recession has global impacts.
However, the spotlight shifts to the next Federal Reserve meeting in September, and people are awaiting any rate cuts. \”Currently, markets are pretty shaky and remain unpredictable until the Fed meeting in September, which means that changes in both directions, although not violent, can occur with posting speed,\” commented Stefan Angrick, a senior economist with Moody’s Analytics.
While the US markets try to find their bearings, the global economic environment and the influence of central banks on them will be closely observed.
