Wall Street Tumbles Again At The Start Of September
The start of the month did not work out so well for Wall Street as U.S. stocks fell slightly on the first day of September. Worry and anxiety regarding China got the best of investors, leading the Dow Jones Industrial Average to go down slightly by 2.84%, representing a decline of 469.68 points.
There is general consensus that China’s economic slowdown may be unavoidable. Adding to the jitters is the fact that China experienced a rapid decline in its manufacturing sector in August, marking the fastest shrinkage it has ever had in three years, according to Reuters. Coincidentally (or perhaps, as an effect of China’s manufacturing slowdown), the U.S. manufacturing sector also saw a growth slump in August, experiencing the weakest growth it has had in more than two years.
A survey released by the International Monetary Fund (IMF) last July also revealed that emerging and developing economies including China, Latin America, North Africa and the Middle East are expected to slow down slightly this year with growth expected to only be around 4.2%, compared to 2014’s growth of 4.6%. In contrast, the IMF believes that advanced economies like the U.S. are expected to experience economic improvement. Moreover, the economic weakness experienced by North America in early 2015 is seen as a mere “temporary setback.”
Meanwhile, the S&P 500 is also down by 2.96%, falling to 1,913.85. Furthermore, the S&P energy index dropped 3.7% while the S&P financial index also fell by 3.5%. At the same time, the Nasdaq Composite experienced a drop of 2.94%. On the other hand, the CBOE Volatility Index is up by 10.45%. This is also known throughout Wall Street as the “fear gauge.”