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【introduction】global markets suddenly plunged

china fund news reporter taylor

brothers and sisters, the overseas markets are not peaceful tonight, and all kinds of assets have experienced a plunge.

let's see what happened.`

among them, the three major u.s. stock indexes opened low and fell throughout the day. the dow jones industrial average fell nearly 500 points at one point, the nasdaq fell more than 2%, and the s&p 500 fell 1.4%.

u.s. chip stocks extended losses, with nvidia down 7%, and micron technology and tsmc down nearly 6%.

european stock markets extend losses!

the prices of gold and silver plunged, and the international copper price plummeted by more than 3%.

oil prices plunged about 4%.

so what happened tonight that caused a simultaneous global fall?

first, the latest economic data has reignited concerns about slowing us economic growth.

data released on tuesday showed signs of weakness in the manufacturing sector. the s&p global purchasing managers' index continued to contract in august, and the ism purchasing managers' index also fell short of expectations.

the institute for supply management (ism) reported on tuesday that activity at u.s. factories fell short of expectations in august.

the ism manufacturing index came in at 47.2%, up 0.4 percentage points from july’s reading but below the dow jones consensus of 47.9%. the index measures the percentage of companies reporting expansion, so a reading below 50% indicates economic contraction.

in addition, the final value of the us s&p global manufacturing pmi in august was 47.9, while the expectation was 48.1.

chris williamson, chief business economist at s&p global market intelligence, said the further decline in the pmi data suggests that manufacturing's drag on the economy increased in the middle of the third quarter. forward-looking indicators suggest that the drag is likely to intensify in the coming months. slower-than-expected sales have left warehouses piling up with unsold inventory, and a lack of new orders prompted factories to cut production for the first time since january. producers also cut jobs for the first time this year and reduced their purchases of inputs amid concerns about overcapacity. the combination of falling orders and rising inventories sends the bleakest forward-looking signal on production trends in a year and a half and one of the most worrying since the global financial crisis. while lower demand for raw materials has eased pressure on supply chains, rising wages and high freight rates are still widely reported as factors pushing up input costs, which are now rising at the fastest pace since april last year.

second, the bank of japan once again released a signal of raising interest rates.

bank of japan governor kazuo ueda reiterated on tuesday that the central bank will continue to raise interest rates if the economy and prices perform in line with the central bank's expectations.

ueda made the comments in a document submitted to a government panel chaired by outgoing prime minister fumio kishida, explaining the bank of japan's july policy decision.

the yen strengthened after the announcement, and the bank of japan's latest attitude reminded global investors that despite the global market crash caused by the bank of japan's surprise rate hike in july, ueda remained steadfast in his commitment to continue raising borrowing costs if the central bank's expectations were realized.

third, the september curse of the us stock market.

september has been the worst month for the s&p 500 and dow jones industrial average since 1950, according to the stock trader's almanac.

over the past 10 years, the s&p 500 has fallen an average of 2.3% in september, according to factset. that makes september the worst month for the index over that time period. in addition, the s&p 500 has posted losses in each of the past four septembers — including a 9.3% plunge in 2022.