Markets took a beating — and there may be worse ahead
Markets took a beating this week, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all posting their worst week since March. The sell-off was sparked by rising coronavirus cases, the end of stimulus talks in Washington and uncertainty about the upcoming election.
The Dow dropped 3.4%, the S&P 500 fell 3.5% and the Nasdaq Composite was down 4.7%. The tech-heavy Nasdaq was the hardest hit, with Apple, Microsoft and Amazon all falling more than 4%.
The market sell-off was further exacerbated by an increase in coronavirus cases in the U.S. and Europe. Hospitalizations are rising in many states and countries, leading to renewed restrictions and fears of a second wave.
At the same time, stimulus talks in Washington have stalled, with no agreement in sight. The lack of a stimulus package has increased uncertainty about the economic recovery and weighed on investor sentiment.
Finally, the upcoming election is also creating uncertainty. Polls show a tight race between President Trump and Joe Biden, and investors are worried that the outcome could be contested and lead to a prolonged period of political uncertainty.
The markets have taken a beating this week, and it could get worse. If the coronavirus continues to spread, stimulus talks remain stalled and the election is contested, the markets could see further losses. Investors should be prepared for more volatility in the weeks ahead.
