Stocks on Rise after Financial Scare based on Chinese Economy
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Dow Jones, NASDAQ, and S&P stocks are now rising over 2% after the financial scare last week when these major stocks had dropped almost 4%.
The stocks dropped in the first place as a “part of a global wave of selling triggered by the slowdown in China” says Alex Veiga and Steve Rothwell. Since China has been importing much less. this took a big hit on the entire world economy because many countries, both big and small, have exports focused on China.
Since China’s import levels you are slowing down, it led to China’s economy slowing down as a whole which was in return, scaring investors and led to the major stocks in the U.S. to take a major hit because investors were unsure of where to place their money after the world’s second largest economy was taking a hit.
After a couple of days however, most investors had realized that the financial crisis was not a crisis, but it was in fact a scare. The Wednesday after the scare, stocks started to rise again and for some of the major markets, this has been their highest rise since 2008.
However, this dip was expected by most economists and stock market specialists because since 2008, major markets have been on a steady and slow rise for the longest time and it was naturally time for a dip.
USA Today says that these corrections (the occasional peaks and dips) are only short term because as the “U.S. economy naturally peaks and troughs over time…the stock market will also have its peaks and troughs.”