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Stock Market crashing after fear grows with new COVID-19 variant
Markets around the world experienced simultaneous drops as stocks plunged due to traders switching assets after delta coronavirus renews concerns about economic recover.
Now, investors are trying to weigh the if the economic recovery will continue even with the renewed threat of coronavirus that will drive a new set of restrictions and lockdown that will surely negatively affect the economic rebound, even the stock rally that reflected a rally for record levels may get reversed. Most of the traders and investors made a switch to the more stable Treasuries, which also added to the drop in stock values.
The reopening trade which was pushed ahead by the equity rally of this year took the brunt of losses, especially the cyclical companies. Industrial, financial, and commodity shares are the ones leading the losses under S&P, which was its biggest decline in two months. Even the Dow experienced its biggest drop in nine months, while the continuous losses for small caps were further extended to now 10% from March's record high.
Due to the movements, traders across the globe seemed to have agreed upon pulling back from risks, as such affecting Treasury rates which pulled down to its lowest in the last five months, making its yield curve almost flat. The benchmark 10-year treasury yield was dragged 12 basis points lower, ending at 1.17%. Even the commodities trade was affected since metal dropped in value, while oil sank after additional supply boost was promised by OPEC+ in 2022. The world's largest cryptocurrency, Bitcoin, slid down to almost $30,000.
Monday's movement in the market are the following:
- The Dow Jones Industrial Average down by 2.09% or 725.81 points and at 33,962.
- S&P 500 Index decreased by 1.59% or 68.67 points and currently at 4,258.
- NASDAQ Composite Index advanced to 14,275 after losing 152.25 points or 1.06%.
- Yield on 10 Year Treasury now at 1.17%.
- Gold up by $0.57 or 0.3% and now at $1,813.415 an ounce.
- Crude down by $0.05 or 0.07% and closed at $68.57 per barrel.
- Bitcoin is down by -2.95% to 30,407.44 per US dollar.
Meanwhile, tension between US and China further worsened after the US, UK and allied countries declared that the Chinese government was behind the cyber-attacks against public and private entities.
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