The US stock market sank to an all time low on Tuesday in the wake of political disturbances in Italy which led to collapsing of euro and effected the trade negotiations with China. The stocks continued to fall all through the day which led the euro to drop further.
The bank stocks were the ones leading the decline. Dow Jones Industrial average dropped by nearly 400 points to close at 24,361.45 due to losses in Boeing, Goldman Sachs and J.P. Morgan. S & P 500 and Nasdaq composite were also affected. Tuesday marked the third consecutive trading day which dropped down to negative numbers. Some of the biggest names in US banking industry like Bank of America, JPMorgan, Morgan Stanley and Citigroup had their share prices dropping resulting in a loss of around 3% involving alarming issues like universal credit affliction and weak rates of interest.
Investors all over the world are in frenzy over the crash of stock market. Present political turbulence which is spread across several countries like Italy, Spain and United States along with dwindling economic condition in the area has put a question mark on the recovery and survival of the bloc.
The bank to be affected worst is Morgan Stanley which lost by around 6%. The stock revenues are all going to drop from what it was a year ago as explained by Daniel Pinto of JPMorgan.
Measures for reviving the Italian economy are being taken but the rising debt rates are a real cause for worry with possibility of default in debt. Spain is also in crisis with an upcoming parliament election on Friday against the current Prime Minister Mariano Rajoy.
In the US, President Trump has decided to move ahead with trade actions against China and continue with the legal procedures too. They are planning to issue a list of Chinese products worth $50 billion liable to a tariff of 25%.