What are the Causes of Today's Stock Market Crash?
US stock markets on Friday crashed by hundreds of points. This follows the last two weeks, where markets have lost hundreds of billions of dollars in value.
Experts point to several possible causes of the steep stock market decline. Possible causes include:
- China and the world markets The Chinese economy and stock market have grown exponentially in the past years, and there is now a major correction taking place. The Chinese stock market has dropped significantly, and Europe has followed; the global markets are now so intertwined that when China sneezes, the rest of the world catches a cold.
- The price of oil Oil is now dipping below $30 a barrel; it had been near $100 in the last two years. Lower oil prices means the oil industry brings in less money; it can also be indicative of lower demand in the economy.
- The psychology of a high stock market The stock market, with the Dow at historic highs in the last 12 months, has been rising for several years. When a drop occurs, people may decide to take their profits and wait out the uncertainty.
We will keep you informed as the market story develops. While all of our hopes are that this correction will be minor and the market will continue to rise, these are uncertain times and events can move rapidly.