While many investors were waiting to see if the Federal Reserve would raise interest rates in the last month or so, more negative news coming out of China is adding doubt to investors about slowing global economic growth and sending the stock market markedly lower in early trading. The Federal Reserve decided last week not to raise interest rates at this time citing a precarious position of the economy.
“The Fed’s decision not to hike last week did not get the positive reaction in the markets that we may ordinarily have expected, which suggests that aside from being priced in, there may now be a willingness for the Fed to just get it out of the way,” said Craig Erlam, senior market analyst at Oanda, in a note Tuesday.
Atlanta Fed President Dennis Lockhart said on Monday a rate hike later this year was still possible.
Furthermore stocks have taken a hit because of falling commodity prices, namely an oil and copper. Copper prices hit two-week lows, while oil was down about 2 percent.
The S&P 500 index slid 25 points, or 1.3%, to 1,941 with all 10 main sectors trading lower. Materials and technology stocks were leading losses. The Dow Jones Industrial Average dropped 190 points, or 1.2%, to 16,283, as all of the blue-chip companies on the index traded lower. The Nasdaq Composite lost 67 points, or 1.4%, at 4,761.
At 11:45 AM the Dow Jones Industrials are down 1.68% or 277. the S&P 500 is down 1.72% or 33.74. Crude oil is down to $45.70 or 2.68%. The NASDAQ has slid 2.11% or 101.73