A global market sell-off sent U.S. stocks plunging on Thursday morning, as investors worried about flagging oil prices and uncertainty around impending interest rate hike as well as concerns overseas with China’s struggling economy.
The Dow Jones Industrial Average exhibited a decent amount of volatility early Thursday, dropping more than 200 points shortly after the markets opened and then briefly rallying before plunging once again. The blue chip index is currently down roughly 23o points, or 1.3%, on the day. The Dow is on pace to record its worst trading day in more than a month — it lost 261 points on July 8 — and the index has dropped about 560 points, or 3.2%, since the start of August.
The tech-heavy Nasdaq composite has lost nearly 90 points on the day, or 1.8%, while the S&P 500 is down 25 points, or 1.2%. The Nasdaq is down 3.8% since the start of the month, while the S&P 500 is down 2.3% in that time.
The Chicago Board Options Exchange Volatility Index (VIX), a measure of market volatility that is often referred to as the “fear index,” is up nearly 13% on the day.
This morning’s market in the U.S. turbulence follows a day of big losses abroad, where Germany’s DAX fell 2.2% and the Shanghai composite in China dropped more than 3%. Global losses reflected concern over falling oil prices, which are close to dropping below $40 per barrel as global oil supplies continue to outpace demand, as well as ongoing uncertainty over the timing of the U.S. Federal Reserve’s long-awaited interest rate hike. The release of minutes from the Fed’s July meeting showed the central bank’s leaders do not yet feel that U.S. economic conditions have reached the necessary point for the first interest rate increase in nearly a decade, though many economists still feel the rate hike will occur as soon as next month.