© AP Photo / Richard Drew
Wednesday trading saw the US’s largest stock index plunge by well over 700 points amid the escalating US-China trade spat, along with the geopolitical conflict in the Persian Gulf, the Hong Kong protests and the UK’s looming exit from the European Union.
The Dow Jones Industrial Average sank by 731 points on Wednesday, shedding 2.78 percent of its total value as of shortly after 2pm EST, with the S&P 500 Index taking a similar hit, dropping 80 points, or 2.74 percent, and the Nasdaq losing 237 points, or 2.96 percent.
All three indexes showed a decline after short and long-dated yields for US Treasury bills inverted for the first time in over a decade, with analysts taking the inversion as a potential sign of an imminent recession.
“The markets are really worried now. Germany and the UK will almost certainly go into recession in the next quarter and the US bond yield curve inversion is a strong indication that the US could follow suit next year,” Yannis Koutsomitis, a Belgium-based political and economic analyst, said.
“But also the data from China are not looking good, with industrial production hitting a multi-year low,” the analyst added. According to Koutsomitis, the Dow’s drop may be confirmation that the Trump administration had “shot itself in the foot” with its trade war with China, with other factors, including the conflict brewing in the Persian Gulf, the protests in Hong Kong, and the UK’s coming exit from the European Union, also playing a role.
Earlier Wednesday, new figures from Germany’s Federal Statistics Office showed second quarter growth falling by 0.1 percent, with total 2019 growth projected at just 0.5 percent, down from 1.5 percent in 2018. Last week, the British Chamber of Commerce in Germany, a UK-German business