Australian investors are set for more losses on Tuesday with Wall Street plunging to start its week.
A scary day that started with a plunge abroad reminiscent of 1987 ’s crash has swept around the world and pummeled Wall Street with more steep losses, as fears worsen about a slowing U.S. economy.
Professional investors cautioned that some technical factors could be amplifying the action in markets, but the losses were still neck-snapping. South Korea’s Kospi index careened 8.8 per cent lower, stock markets across Europe sank more than 1 per cent and bitcoin dropped below $US55,000 from more than $US61,000 on Friday.Even gold, which has a reputation for offering safety during tumultuous times, slipped 1 per cent.
Some of Wall Street’s recent declines may also simply be air coming out of a stock market that romped to dozens of all-time highs this year, in part on a frenzy around artificial-intelligence technology and hopes for coming cuts to interest rates. Critics have been saying for a while that the stock market looked expensive after prices rose faster than corporate profits.
Still, stocks of companies whose profits are most closely tied to the economy’s strength took sharp losses on the fears about a slowdown. The small companies in the Russell 2000 index dropped 2.8 per cent, further dousing what had been a revival for it and other beaten-down areas of the market.
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