Global Stock Markets Plunge and Rise in Dynamic Week
2017 saw record-setting climbs in global stock markets. This past week, however, has seen a significant variation.
On Friday, February 2nd, the Dow closed down 666 points, or 2.5%. This was the largest percentage decline since the Brexit referendum in June of 2016. Though the cause is uncertain, analyst speculate that the plunge was the result of a strong January jobs report. This report showed that wages grew at the fastest pace in eight years, but fed concerns of inflation, which could cause the Federal Reserve to increase interest rates faster than expected.
Markets continued to decline after the weekend; on Monday, just after 3:00PM EST, they entered a freefall. The Dow plummeted 1,597 points, the most ever lost in the middle of a single trading day. Though they made a slight recovery at the end of the day, the Dow closed down 1,175 points—around 4.6%, making this the biggest single-day point drop in Dow history.
The following day, these losses spread to Asian and European markets; major markets in Europe lost 2%, while the Japanese Nikkei took a 4.7% hit. United States stocks entered a brief correction period on Tuesday but finished the day up just 567 points. Though markets stayed shaky on Wednesday, there were no dramatic losses or gains.
Thursday saw another massive drop—the Dow lost 1,033 points, another 4.2% decrease, making it the second-words point drop in history (behind Monday). This turbulence was expected after a full year of steady markets, but the drops were not expected to be this severe.