On a weak start, US stock indices took off in September and closed the previous month in the red, as surveys showing weak factory activity in Europe and Asia heightened fears of a global economic slowdown. While the Dow Jones dropped 55.85 points during trading, the Standard & Poor’s index fell 0.46%, compared to a 0.9% decline for the Nasdaq index.
European shares began September with a sharp decline, as concerns about sharp increases in interest rates and record inflation rates in the region pushed the Stoxx 600 index to its lowest levels in seven weeks on Thursday.
Wall Street
US stocks fell for the fourth session in a row, on Wednesday, and recorded the weakest performance for the month of August in seven years, as concerns persisted about large interest rate increases from the Federal Reserve.
Wall Street’s three major indices suffered the largest declines in percentage terms for the month of August since 2015.
Dow Jones ended the month down 4.06 percent, while Standard & Poor’s fell 4.24 percent, and Nasdaq fell 4.64 percent.
September is the most difficult month for the US stock market in general, and raises fears among some fund managers and begins a large-scale sale; According to the Stock Trader Almanac, fund managers are becoming more inclined to sell underperforming positions towards the end of the third quarter. Since 1945, September is usually the worst month for the S&P index.
The benchmark “Standard & Poor’s” has remained in “bearish territory” since the beginning of the year, recording its lowest level in June since December 2020 after the Federal Reserve announced the largest interest rate hike since 1994, which prompted investors to expect a hike Interest rates by the Federal Reserve, but the index has rebounded strongly since June, and has regained half of its losses for the year; This recovery was driven by a combination of strong earnings announced by leading companies as well as hints that inflation may have already peaked and therefore the Fed may slow down the rate hike.
On the other hand, with investors and traders returning from the summer holidays, some are worried about a bumpy ride in September, due to concerns about this season, how the pace of the Fed’s rate hike will be and its economic impact.
bleak forecast
Among the main reasons for the gloomy outlook, is the belief that the Fed will continue to raise interest rates and keep them above neutral for a longer period than what the markets recently expected a week ago, which will affect consumer demand and the housing market; Nearly half of market participants expect the Fed funds rate to end up above 3.7% by the end of the year, up from 40% a week ago, and currently hovering between 2.25% and 2.5%.
European stocks
European shares fell on Wednesday, ending the month with losses, while data showed that inflation in the euro zone in August hit another record high, while energy concerns escalated after Russia began cutting gas flows to Germany through a major supply route.
The benchmark Stoxx 600 index ended the month down 5.1% on concerns about monetary tightening by central banks, escalating risks of recession and rationing energy distribution in Europe.
In European markets, the German “DAX” index fell 4.8% during August, the French “CAC 40” index lost 5%, while the British FTSE 100 index declined less sharply, losing 1.9%.
Japanese stocks
Japan’s Nikkei index hit its lowest closing level in a month on Thursday, weighed by losses in chip-related shares after Nvidia was hit overnight by a US order to halt sales of the top artificial intelligence chip maker to China.
The Nikkei fell 1.53 percent to close at 27,661.47 points, the lowest level since August 2, and the broader Topix index fell 1.41 percent to 1935.49 points. In August, the Nikkei rose 1%, while Topix rose 1.2%.
On the other hand, the performance of Chinese stocks declined, with the Shanghai index falling 1.6 percent, while the “Hang Seng” index in Hong Kong closed down 1% in a month.
(agencies)