Why are Global Stock Markets Falling?

Asian stock markets fell dramatically on Tuesday in reaction to US equity weakness on Monday; is this the beginning of the end of the bull run?

Emma Wall 6 February, 2018 | 6:44AM

why are stock markets falling trading s&p 500 nasdaq

It is said that when the US sneezes, the rest of the world catches a cold; and that has certainly proved to be true this week as a fall in the US stock market triggered a global equity downturn.

US stocks listed on the Dow Jones, S&P 500 and tech-focused Nasdaq markets have fallen 8% since their all-time highs last month, in reaction to stronger employment figures released on Friday. The market is concerned that the good jobs figures will provide further evidence of a strong economy to the US Federal Reserve central bank, and force the Federal Open Market Committee to raise interest rates faster and higher than predicted. This in turn would make fixed income assets more attractive, and trigger investors to sell higher-risk equities for the more attractive income of a lower-risk bond. 

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About Author

Emma Wall  is former Senior International Editor for Morningstar

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