The broader-market sell-off
After yesterday’s big relief, US investors (VTI) seem to be readying for another round of intense sell-offs. On December 26, the S&P 500 Index (SPY), NASDAQ Composite Index (QQQ), and Dow Jones Industrial Average (DIA) rose 5.0%, 5.8%, and 5.0%, respectively. However, today at 11:16 AM ET, these indexes were trading with 1.7%, 2.0%, and 1.7% daily losses, respectively. Let’s take a look at what could be driving this pessimism today.
Trump’s “feel for the market”
On December 24, President Donald Trump criticized the central bank, saying, “The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders.”
The next day, on Christmas, Trump tried to boost investors’ confidence, saying, “We have companies — the greatest in the world, and they’re doing really well, They have record kinds of numbers. So I think it’s a tremendous opportunity to buy. Really a great opportunity to buy.”
Why are investors worried?
Since the beginning of the fourth quarter, investors have feared rising interest rates. After the Federal Reserve’s recent somewhat dovish comments on the economy, investors remained confused. Other worrisome factors include fear of a global economic slowdown and the US–China trade dispute, both of which remain without any immediate or long-lasting solutions in sight. These tensions could be why the broader markets are falling today.