It was chaos on Wednesday as the S&P 500 Index collapsed by around 3.2%. It was its biggest loss since February 2018. The fall comes amid the increase in the yields of the American treasure and the worry that the trade face-off between the United States and China could worsen further in the days to come.
Speaking about the slump of the American stock index, Baird's chief investment analyst Bruce Bittles shared, "October weakness intensified today as volume surged and selling was widespread. We may need to see evidence of exhaustive selling, increased investor pessimism and a healthier breadth back-drop to suggest that near-term risks are ebbing."
He also went on to note, "While seasonal tendencies become increasingly favorable moving toward year-end, we have yet to see evidence that overall selling has reached downside exhaustion. For now, caution remains warranted."
In the month of October, the S&P 500 has slumped by around 3.3%. The Dow Jones has seen a drop of around 4.4% while the Nasdaq has been the biggest loser of the three with a drop of around 7.5%. Meanwhile, the American president Donald Trump who had previously criticised the Fed Reserve increasing the key rates in its September meeting, took another stab at critiquing their move.
Addressing the gathered press in one of his rallies in Pennsylvania, Trump mentioned, "Actually it’s a correction that we’ve been waiting for for a long time, but I really disagree with what the Fed is doing."
Trump's statements came even as there were heightened worries that the slide in the stock market was leading to the phenomenon of stock market correction.