U.S. equity markets were poised for a sharp selloff on Monday as fears about a global economic slowdown plagued global investors.
As of 8:00 a.m. ET, Dow Jones Industrial Average futures tumbled 619 points, or 3.73 % to 15861. S&P 500 futures dropped 64 points, or 3.34 % to 1907, while Nasdaq 100 futures plunged 205 points, or 4.85% to 3998.
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One session after the Dow officially entered correction territory, Wall Street appeared set to extend a selloff in global equity markets as worries about significant deterioration in China sparked fear in the minds of investors around the world. The concern comes as traders wonder what the next shoe to drop is from Chinese officials to stem the bleeding. The world’s second-largest economy moved two weeks ago to devalue its currency, the yuan, on the heels of continued weakness in its economic data.
“Regardless of what the Chinese government and PBoC might be saying and doing, they are currently learning a lesson that many have learned before them, namely you can only fight against market forces for so long before you end up losing,” Alastair McCaig, IG market analyst, said in a note Monday morning.
China’s Shanghai Composite Index plummeted more than 9% during the session Monday, and closed down 8.5% pushing equity markets in Asia to give up their 2015 gains. Hong Kong’s Hang Seng tumbled 5.17%, while Japan’s Nikkei dropped 4.61%.
As the carnage spread, European equity markets didn’t fare much better. The Euro Stoxx 50, which tracks large-cap companies in the eurozone, declined 3.73%, plunging further into correction territory after notching its worst week in four years last week. The German Dax shed 3.53%, while the French CAC 40 sank 3.87%, and the UK’s FTSE 100 dropped 3.44 %.
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