US Markets Were Turbulent, SPY’s Major Sectors Fell by 2.4%


Jan. 8 2016, Updated 4:44 p.m. ET

Why did SPY fall?

The SPDR S&P 500 ETF (SPY) and the Direxion Daily S&P500 Bull 3X ETF (SPXL) fell by 2.4% and 7.1%, respectively, on Thursday, January 7, 2016. All of SPY’s major component sectors remained in red for the second consecutive day.

The above graph shows the fall in all of SPY’s component sectors as of January 7.

Most of the sectors ended with a loss of around 2.0%. The technology, financial, material, and industrial sectors were hit the worst. US equities were hit by the sell-off in the Chinese stock market. It took place for the second time this week. Tradings were halted in the Shanghai Stock Exchange on Thursday. The shares fell by 7% in the first 30 minutes of trading. It triggered the circuit-breaker mechanism. It impacts the markets’ sentiments. The China Securities Regulatory Commission announced that the circuit-breaker mechanism will be temporarily suspended on Friday, January 8.

Article continues below advertisement

Impact on global markets

The number of decliners outnumbered SPY’s advancing stocks on Thursday, January 7. The fall in Chinese equities directly impacted industrial stocks like Joy Global (JOY), Fluor (FLR), Paccar (PCAR), Caterpillar (CAT), and Jacobs Engineering Group (JEC). They yielded -7.9%, -2.2%, -3.0%, -3.4%, and -2.7%, respectively, on the day.

China’s woes had a negative impact on stock markets across the world. The iShares MSCI Japan ETF (EWJ), the iShares MSCI Germany Index Fund (EWG), the iShares MSCI France Index ETF (EWQ), and the iShares MSCI UK ETF (EWU) fell by 1.5%, 2.0%, 1.4%, and 2.8%, respectively, on Thursday, January 7. The stock markets feared the global economic slowdown.

Next, we’ll look at how various market aspects responded to the sharp sell-off in China’s equity market.


More From Market Realist

  • Open sign on a sidewalk
    Macroeconomic Analysis
    Top Reopening Stocks to Play the Shifting Market Sentiment
  • Morgan Stanley sign and stock numbers
    Macroeconomic Analysis
    Morgan Stanley's Buyback Stock Picks in 2021
  • Black Wall Street sign is sign of ethical investing
    Macroeconomic Analysis
    Ethical Investing Stocks and Funds for Your 2021 Portfolio
  • New York City skyline and Goldman Sachs logo
    Macroeconomic Analysis
    Goldman Sachs: Options Trade Picks to Play Earnings Season Volatility
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.