Major indices are red. Investors are running to the exits, eyes covered.
All as the Dow slips 330 points. The NASDAQ shed 88, as the S&P 500 falls 35 points. All thanks to U.S. manufacturing woes that have investor fearing a recession. The ISM September survey on manufacturing registered at 47.8%, down from 49.1% from July. It’s also the worst on record since June 2019, and shows contraction at less than 50.
“The disappointing data is only fanning long-standing fears of slowing global growth,” Alec Young, managing director of global markets research at FTSE Russell said, as quoted by MarketWatch. “And with U.S.-China trade expected to produce little in the way of near-term breakthroughs, investors continue to favor counter-cyclical, defensive stocks with high dividend yields as weak data pushes interest rates ever lower.”
It’s a clear sign the trade war has done a good amount of damage.
It also raises the possibility we’ll be in recession before long. At the moment, many are bettering the latest economic data will force Jerome Powell to cut rates again this month.
At the moment, expectations for a rate cut soared to 60% from 40% a day ago.
Following the ISM news, President Trump tweeted, “As I predicted, Jay Powell and the Federal Reserve have allowed the Dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected. Fed Rate too high. They are their own worst enemies, they don’t have a clue. Pathetic!”
Stay tuned for more on this developing story. We’ll keep you fully updated.