Global stock market saw a major meltdown this week, caused by concerns over the tightened fiscal policy in the U.S. A bloodbath in American markets earlier this week has now extended to Asia and Europe.
On Wednesday, Oct. 10, the Dow Jones Industrial Average fell more than 800 points, or 3.2 percent, its worst one-day drop since February, while the S&P 500 witnessed its fourth consecutive loss and the NASDAQ fell 4 percent.
The technology sector plummeted down 4.8 percent, the biggest percentage decline since August, 2011. Among the tech firms that have suffered the most, Microsoft dropped 5.4 percent, Apple 4.63 percent, Amazon 6.15 percent, and Alphabet, the parent company of Google, sank 5.06 percent.
According to Forbes’ calculation, the fortune of Amazon’s CEO Jeff Bezos, the world’s richest man, plummeted $9.1 billion. Bill Gates lost $1.8 billion, and Mark Zuckerberg’s net worth shrunk by $2.4 billion.
Chinese tech firms listed in the U.S., such as Alibaba and Baidu, were not spared from the big stock market selloff. Shares of Alibaba dropped by over 5 percent; JD.com, Baidu and NetEase also dropped at least 3 percent.
The impact of the turmoil in the U.S. stock market spread widely. Benchmark indexes on Wednesday in Shanghai and Shenzhen closed with drops of 5.2 percent and 6.45 percent, respectively. They marked the lowest level since November 2014 for Shanghai Composite Index and the lowest point since September 2014 for Shenzhen Composite Index. Hong Kong’s market also went down over 3 percent in late afternoon trading.
In Europe, the U.K. FTSE 100 fell 1.27 percent while Germany’s DAX dropped 2.21 percent on Wednesday.
Some speculated that the global stock market plunge was caused by investors pulling money out of tech stocks and instead targeting cheaper options in reaction to the rising bond yields and interest rates in the U.S. The yield of a ten-year treasury bond has reached 3.2 percent, marking the highest level in seven years. It is also predicted that the Federal Reserve will increase interest rates for the fourth time this year.
In addition, some regarded the stock market turbulence as a correction of the tech stocks’ abnormally fast growth earlier this year.