In what sounded as a relief for the investors, US stocks steadied on the 3rd day from plunging deep into loses as major indexes rallied on Friday. While tech based Nasdaq settled 2.3% higher, the broader S &P 500 climbed by 1.4%. The Dow Jones Industrial Average closed 1.2% higher on the same day.
Prior to Friday, the indexes bled profusely with Dow Jones shedding over 1300 points in 2 days, while both Nasdaq and S&P taking huge plunge on the previous 2 days.
Experts attribute the massive shedding of the stock to increasing interest rates. The Fed Reserve has increased the short-term interest rates thrice in the past 9 months of 2018. This increase has sent ripples to the other economies of the US as well as the investment markets.
President Donald Trump did not mince his words and went ahead to criticize the Central Bank for being strict and “going loco”, thus putting the blame for the stock decline on the Fed Reserve. It must be noted that the past Presidents have restrained from politicizing the actions of Feds.
The ongoing feud between the US and China, which has recently heated up to a great extent, has also unsettled the markets causing unrest. Reports however suggest that the US and Chinese Supremo are likely to meet at G-20 Summit to be held in the coming month.
Overall, the US economy has been giving positive signals with unemployment rate pegged at 3.7%, being the lowest in the last 49 years. Also, the wage growth rise indicated that the low-income group employees would finally see an increase in their earnings.
The US Stocks have enjoyed the longest bull run post World War II and have not seen major declines. Dow Jones has also grown more than 4 times since March 2009.