NEW YORK – August 21,2015 (Gephardt Daily) – U.S. stock markets took their deepest dive of the year Friday, closing down 531 points. It ended the worst week for the Dow since 2011.
Markets around the world also experienced dramatic drops for the week and most are in negative territory for the month.
Three major factors are driving the markets down including:
1. Worries that China’s economy is slowing much faster than its government predicted or most analysts expected. Very few believe Chinese officials who claim their country’s economy grew at seven percent earlier this year.
2. Investors are preparing for the U.S. Federal Reserve to raise the benchmark interest rate next month. However, the central bank is sending mixed signals and that has triggered the markets’ worst enemy: uncertainty.
3. Oil prices continue to drop. As of Friday, they are below the key $40 level to their lowest point since 2009.
The plunge took the Dow into what is known as correction mode, it’s down 10% from its most recent high point recorded on May 19.
