Global stocks plunge after Wall Street bloodbath

The stunning rout in U.S. stocks has spread to global markets.European stocks were hit on Tuesday, with benchm...

Posted: Feb 6, 2018 4:22 PM
Updated: Feb 6, 2018 4:23 PM

The stunning rout in U.S. stocks has spread to global markets.

European stocks were hit on Tuesday, with benchmark indexes in Paris, London and Frankfurt dropping 2%.

Japan's Nikkei nosedived 4.7%, while Hong Kong's Hang Seng suffered a loss of 5.1%.

Those sharp falls came after a brutal trading session in U.S. markets on Monday. The Dow closed down 1,175 points, or 4.6%. It was by far the index's biggest ever point decline for a single trading day.

U.S. stocks swung wildly in early trade on Tuesday.

Related: This is why the Dow is plunging

The market turmoil began early last week but has now intensified.

"Traders are getting nervous there is more to come," said Greg McKenna, chief market strategist at currency trading platform AxiTrader.

Selling on global stock markets has ramped up because of expectations the U.S. Federal Reserve could increase interest rates more quickly than previously thought. Higher interest rates can weigh on companies' earnings and wreak havoc in bond markets.

The growing concerns about the pace of interest rate hikes came after U.S. jobs data on Friday showed wages were growing at their fastest pace since 2009. That's led to fears that inflation -- which has been unusually low in recent years -- could be about to make a big comeback.

Paul Donovan, global chief economist at UBS Wealth Management, said that investors should take a longer view.

"The significance of equity market losses is best viewed against the calm of past months. This is a rather abrupt reminder of what volatility looks like," he said. "Nothing has changed in economic terms."

Related: Market fear is back in a big way

The worries arrived at a time when the Dow and many other major stock indexes were trading near record highs. That had led some experts to warn that markets were overdue for a correction.

The sell-off in Japanese stocks was exacerbated Tuesday as investors flocked to the yen, which is often viewed as a safe haven during periods of market panic, said Jingyi Pan, a strategist at stockbroker IG Group.

A stronger yen is bad news for profits at big Japanese exporters.

The Nikkei has been one of Asia's strongest performing indexes lately, but its plunge this week has now erased all of its gains for the year so far.

-- Charles Riley and Daniel Shane contributed to this report.

New York Coronavirus Cases

County data is updated nightly.

Cases: 1611031

Reported Deaths: 47156
CountyCasesDeaths
Queens2061178675
Kings2046548996
Suffolk1595713049
Nassau1452902890
Bronx1402445807
Westchester1055502078
New York1005843852
Erie640661585
Richmond558791558
Monroe51913977
Rockland37948884
Orange36102720
Onondaga32054620
Dutchess21862404
Albany20526328
Oneida19519475
Niagara15100309
Broome14412333
Saratoga11723145
Schenectady10685177
Ulster9854226
Rensselaer8860130
Putnam820486
Chautauqua7213122
Chemung6397130
Oswego593589
Ontario569988
Steuben5452137
St. Lawrence533680
Cayuga531287
Jefferson468163
Sullivan466259
Herkimer4531106
Wayne440964
Genesee4335118
Cattaraugus432476
Madison379284
Livingston347855
Clinton346826
Tompkins341442
Columbia334794
Fulton324580
Montgomery3121105
Cortland310260
Allegany285681
Warren279555
Wyoming277848
Tioga277156
Greene259869
Orleans242280
Chenango239069
Washington227952
Otsego226743
Lewis202630
Franklin199612
Seneca156453
Delaware146933
Essex131726
Schoharie117612
Yates101126
Schuyler85212
Hamilton2772
Unassigned217137
Out of NY0191
Rome
Partly Cloudy
26° wxIcon
Hi: 33° Lo: 22°
Feels Like: 26°
Binghamton
Clear
27° wxIcon
Hi: 34° Lo: 24°
Feels Like: 19°
Rome
Partly Cloudy
26° wxIcon
Hi: 35° Lo: 25°
Feels Like: 26°
Rome
Mostly Cloudy
26° wxIcon
Hi: 29° Lo: 19°
Feels Like: 26°
WKTV Radar
WKTV Temperatures
WKTV Severe Weather
2021 Golfer's Paradise Card - 21 Courses for only $99.99
Saluting Those Who Are Proud 2 Serve