Last night, Wall Street experienced its worst week in a decade as the “Santa rout” pushed the Nasdaq down into bear market territory.
The Nasdaq dropped by three percent on yet another volatile day’s trading and has now slipped by nearly 22 percent from the high that it recorded on the 29th of August.
The S&P 500 dropped by 2.1 percent and is currently on track for its biggest percentage drop in December ever since the Great Depression. The Dow Jones dropped by 1.8 per cent, to its lowest level since October 2017.
Last Friday night, a bad week ended with a late slide after Peter Navarro, a trade adviser of the United States of America, said that China and the US might not be able to reach a trade agreement at the close of a 90-day negotiating window unless Beijing would agree to a profound overhaul of its economic policies.
The chief investment officer at Boston Private, Shannon Saccocia, stated: “That’s definitely a weight on the market.” She was referring to the comments of Navarro.
She added: “For investors, there’s a heck of a lot of small storms to be sailing ships through.”
The threat of a partial shutdown of the US government, which eventually took effect at midnight, also affected the stock throughout the day.
Lawmakers were not able to agree over the $5 billion (£4 billion) funding of the border wall of Donald Trump, the President of the US, with Mexico.
The FAANG group of momentum stocks also fared poorly. The shares of Facebook were down by 6.3 percent, Amazon dropped by 5.7 percent and Netflix plunged by 5.4 percent. The shares of both Alphabet Inc, the Google parent company, and Apple Inc dropped by over 3 percent.
The shares were temporarily boosted when John Williams, the President of the New York Fed, said that the Fed was open to reassessing its views.
Earlier this week, the Federal Reserve increased interest rates, however, despite noting a series of economic risks, Jerome Powell, the Fed chairman, committed to two more increases in 2019.
Williams suggested a difference of opinion within the Fed. However, the relief that was provided from his comments was short lived as the government shutdown and more woes over the US-China trade dispute compounded the Wall Street misery.