Sharp dip on Wall Street: S&P 500 index heading for worst week since April

The recent surge in crowning in the United States, the upcoming presidential election and the lack of a new crisis package by the authorities sent the key indices on Wall Street directly on Wednesday.

This is what it looks like at closing time:

• The industrially active Dow Jones fell 3.43 percent.
• The Nasdaq Technology Index fell 3.73 percent.
• The broad S&P 500 Index fell 3.52 percent.

The broad S&P 500 Index has fallen more than 5 percent so far this week, and if the decline continues, it will be the worst week since early April. As of now, the first week of June comes in as the worst week for the broad index after the initial crown shock. Then the index was down 4.78 percent.

For the Dow Jones index, which weighs on the industry, Wednesday’s slide was the worst since early June.

– The market has believed an optimistic story that we will gain control of the virus and that profits and activity will return. Now we see the spread of a powerful new virus, and the picture of the infection makes people start to wonder if the background to the rally we’ve seen in recent months will play out, says Chief Analyst Erik Bruce at Nordea Markets.

The decline on Wall Street came after another lead-laden trading day on the Oslo Stock Exchange. The leading index is down nearly seven percent so far this week, after falling more than three percent on Wednesday. Indices also fell sharply in other parts of Europe. London’s FTSE 100 ended Wednesday down 2.6 percent, while the German Dax fell 4.2 percent.

Wide drop

So not many people escaped the stock market crash on Wall Street on Wednesday. Facebook, the owner of Google Alphabet, and Twitter fell about five percent, while Amazon ended the day down 3.8 percent.

Microsoft, for its part, fell just under five percent, after presenting quarterly figures on Tuesday night Norwegian time.

At the same time, the Vix index rose to just over 40 points, reaching its highest level since mid-June. The index is often referred to as the “fear index” and it says something about expectations of market volatility.

At closing time on Wall Street, a barrel of North Sea oil is trading at just over $ 39, a drop of about four percent from yesterday’s closing price. This is the lowest level since June.

“Amplifies the uncertainty”

As is well known, the US stock market has hit several highs since the initial shock in March. Tech stocks and the Nasdaq Heavy Tech Index in particular have seen prices skyrocket. But after the summer, the markets have been increasingly affected by the continued situation of the crown, in addition to the uncertainty about the upcoming US presidential elections and the lack of a new crisis package by the authorities. Americans.

“All of this is connected, and the fact that the US authorities are not responding to the increased infection with a large crisis package reinforces the uncertainty,” says Bruce.

He believes that uncertainty has increased recently, as several countries in Europe have reported increased infection and the reintroduction of restrictions.

– But one of the things that hit the markets will disappear when the elections end. No matter who wins, there will be a crisis package, and I still believe that the crown as an uncertainty factor will disappear, for example, when a vaccine is ready, says Bruce.

A new crisis package for coronary Americans seems increasingly likely to be delayed after the election. Democrats and Republicans in Congress have been unable to find a solution, and by Tuesday the Washington Post wrote that the negotiations are largely over.

President Donald Trump, for his part, has predicted a “massive crisis package” after the election. (Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.