US stocks see worst first half drop in more than 50 years

This news is property of: BBC

Another major US stock index, the Dow Jones Industrial Average, fell by more than 15% in the first half of this year, the biggest drop for the period since 1962.

At the same time the technology-focused Nasdaq Composite lost almost 30%, marking its largest percentage drop for the first half of a year.

Major stock market indexes outside the US have also fallen sharply this year.

The UK’s FTSE 250 has dropped by more than 20%, while Europe’s Stoxx 600 index has slipped by almost 17% and the MSCI index of Asia-Pacific markets has fallen by more than 18%.

It comes as many of the world’s biggest central banks take steps to slow the rising cost of living, including raising interest rates.

Earlier this week, the bosses of three of the world’s biggest central banks warned that the era of moderate inflation and low interest rates had ended.

At an annual meeting in Portugal, the heads of the US Federal Reserve, European Central Bank and Bank of England said action must be taken quickly to prevent price rises from getting out of control.

However, they also cautioned that measures to rein in an inflation shock caused by the Ukraine war and pandemic may have a significant negative impact on global growth.

“Is there a risk that we would go too far? Certainly there’s a risk, but I wouldn’t agree that it’s the biggest risk to the economy,” Fed chairman Jerome Powell said.

“The bigger mistake to make, let’s put it that way, would be to fail to restore price stability,” he added.

Last month, the Fed announced its biggest rate rise in nearly 30 years as it ramped up its fight to rein in soaring consumer prices.

The Bank of England also raised its key interest rate to the highest level in 13 years, from 1% to 1.25%.

Source: BBC

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