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Awkward' Global Economy, Dow Jones

Awkward' Global Economy, Dow Jones

A sell-off in the stock market in the United States brought major trading indexes to their lowest point throughout the year.

"The market transition is clearly happening very quickly, due to concerns over inflation risks and the aggressiveness of the Fed," Quincy Krosby of LPL Financial told CNBC International . "If you look at  bond yields  it's gone up to levels that haven't been touched in years. It's changing the way the market thinks, how the Fed can stabilize prices without breaking things."

The Dow Jones index fell 486.27 points, or around 1.62%, to 29,590.41, the S&P 500 shed 1.72%, while the Nasdaq fell 1.8% at the close of trading Friday.

The Dow Jones closed at its lowest level this year and for the first time below the 30,000 level since June 17. In fact, the Dow Jones had moved in the  bear market  area , which was 19.9% ​​lower than the highest point in  intraday trading.

In the red for 5 of 6 trading weeks, the Dow slumped 4% for the week. The S&P and Nasdaq fell 4.65% and 5.07% this week, respectively.

The stock market sell-off intensified after the Fed announced a 75 bps rate hike on Wednesday and signaled a similar hike would be announced in November.

Pressure also emerged from abroad. The exchange rate of the British currency, the pound, against the US dollar posted its lowest level in 30 years. European stock markets closed 2% lower.

This phenomenon occurred after the UK government announced a policy of massive tax cuts that raised fears of increasingly fierce inflation.

"All of this is a global macroeconomic mess that markets are trying to understand," Krosby said.


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