$4 trillion wiped out as stock markets plummet

After year of record highs, global markets tank, erasing $4 trillion in stock value after Dow Jones suffers largest single decline ever.

Israel National News

World markets lost a total of some four trillion dollars as a global market decline continued for its fourth straight day Tuesday, following a year of rapid growth.

The Dow Jones tumbled 1,175 points on Monday, the single biggest drop in the index’s history, adding to the losses seen at the end of last week. The Dow Jones had risen rapidly during President Trump’s first year in office, adding more than 34% in value from Inauguration Day in January 2017.

From roughly 19,700 last January, the index soared to more than 26,600 at the end of last month.

After peaking on January 26th, however, the upward trend halted – then reversed itself, sending the Dow Jones tumbling down to 24,345 at the market’s close on Monday. That’s erased all of the gains the market made since the second week of December – gains based in part on economic growth stimulated by the Republican-backed tax cut passed just before Christmas.

European markets have also been hit hard, falling some 2.5% since Wendesday. Taiwan’s primary index fell 5% – its biggest drop since 2011, Reuters reported, while Japan’s Nikkei sank 4.7%. Hong Kong’s Hang Seng index faired little better, falling 4.2%.

The recent sell-off was originally sparked by speculation the US Federal Reserve may be planning a series of interest rate hikes amid signals the US economy is heating up – and with it inflation rates.

The Federal Reserve has kept rates at historic lows since the 2007-2008 financial crisis, but has gradually raised them since December 2015. Two months ago, the Fed indicated it would likely increase the pace of the rate hikes, doubling the prime rate by 2020.

“Playtime is official over, kids,” officials from the Dutch financial house Rabobank said. “Rising volatility painfully reminds some investors that one-way bets don’t exist.”

Commodity futures, including petroleum, fell, though gold, platinum, and to a lesser extend silver, all remained strong following sharp rises since mid-December.