Shanghai Stock Market Plunges 7%, U.S. Stocks Dropping

The Shanghai Composite’s seven-percent plunge on the first day of trading in the New Year is creating downward pressure on United States and world stocks. Analysts predict that stocks on America’s exchanges are on track for their largest one-day fall since late September 2015.

Weak economic data in China spurred the global sell-off, forcing Beijing to use its circuit breaker rule to halt trading and prevent additional losses. In addition to the Shanghai Composite’s drop, the Shenzhen Composite fell by 8.2 percent (it’s largest drop in nine years), with Hong Kong’s Hang Seng index dropping by 2.7 percent.

As of mid-morning, the Dow had declined 351 points (two percent) to 17,074, while the S&P 500 dropped 1.8 percent. The Nasdaq Composite fell 2.2 percent. Stoxx Europe 600 was down by 2.2 percent.