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Concerns Over Rising Interest Rates, Trade Tensions, Inflation Drive Dow Down 800 Points

The Dow dropped more than 800 points on Wednesday, its largest loss since February, largely on fears that sharp rises in interest rates and trade tensions will take the air out of the historic U.S. economic expansion. Investors are beginning to keep a watchful eye on inflation, too.

The Dow Jones industrial average dropped 3.1%, or 832 points, closing at 25,598. Asian stock markets opened down sharply on Thursday morning, and European markets followed suit, with the Stoxx Europe 600 down 1.8% in early trading.

Domestically, the Dow was down about 0.5% again on Thursday, with all 11 sectors in the S&P 500 posting declines, the Wall Street Journal reported late Thursday morning.

Short-term interest rates were recently raised for the third time this year by the Federal Reserve, and there’s indications that the money policy group will continue bumping up rates. It has been gradually raising interest rates for more than two years. Continued positive economic reports and the Fed’s upbeat view has pushed bond yields higher and caused concern among investors that even higher interest rates are coming.

Higher rates tend to temper economic growth, and make it more expensive for the government, businesses and consumers to borrow, and also cuts into corporate profit margins. The 10-year U.S. Treasury yield has been spiking, and now stands at 3.2%, a seven-year high.

President Trump on Wednesday blamed the Fed for raising rates too rapidly. Separately, the Treasury Department issued new rules on foreign investments into American companies, with China as the main target.

These tensions could keep markets down for some time to come. “As uncertainty continues to prevail in financial markets across the world, many investors are staying on the sidelines until more clarity emerges in U.S. Treasury and Chinese markets,” Libra Investments’ Yasuo Sakuma told Reuters.

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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.

  • ◦Economy
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