US stock indices hit a new closing low amid robust greenback

On Monday’s close, US stock indices plummeted, the S&P 500 hit a new closing low this year, and the Dow Jones Industrial Average dropped into a negative territory following an interest rate hike and turmoil that rocked global currencies.

The S&P 500 index ended lower by 1.03% to 3,655.04, declining behind the June closing low of 3,666.77. At one point during the trading session, it even dipped to 3,644.76, which is less than eight points aways from its intraday low of 3,36.87.

Consequently, the Dow 30 plunged by 1.11% or 329.60 points to 29,260.81, accelerating its losses in the final moments of trading day. It was down by approximately 20.40 from its January 04 closing high.

Besides, the tech-heavy Nasdaq Composite index tumbled by 0.60% to 10,802.92 points.

On September 27, the British pound declined to a record low against the greenback, plunging 4.00% at one point to an all-time low of $1.03820. It has since come off its worst levels on market’s speculation that the Bank of England could raise the interest rates more to cool the United Kingdom’s flaming inflation.

Robust greenback is a headwind for US stocks

An analyst said that the US dollar’s route at its highest valuation against other currencies in over 35 years is a massive headwind for American stock investors.

This means that an overvalued currency is a negative influence on the performance of equities in its country.

Hence, the latest combination of cheaper stocks and inexpensive currencies outside the United States seems a promising backdrop of a reversal of the US equity dominance of the last decade.

Furthermore, a cheap currency is a robust equity tailwind in some developed economies, leaving advanced markets such as Europe and Japan poised to benefit from their undervalued currencies.

User Review
0 (0 votes)


Leave a Reply


Share this on


Rec­om­mended for You