The temporary boost from the interest rate rise has quickly faded.
Stocks plummeted across the board after the Federal Reserve finally raised interest rates, and other big negatives prompted investors to sell.
The Dow Jones Industrial Average fell 367.29 points — 2.1 percent — down to 17,128.55. The S&P 500 also took a beating, dipping 1.8 percent or 36.34 points down to 2,005.55, whereas the Nasdaq lost 1.6 percent of its value, falling 79.47 points to 4,923.08, according to an Associated Press report.
It was the second big loss for the markets in a row.
What’s driving the dips? For one thing, enthusiasm appears to have waned since Friday after the Fed boosted interest rates, showing confidence in the strength of the economy. In addition, Japan’s market has been sinking after adjustments were made to its stimulus program that disappointed investors.
Also, energy prices have been back to dropping, putting a dent in oil stocks, and there were also worries about weak global growth resulting in less oil being needed for shipping and transportation.
Central banks in Europe have also been scrambling to get their economies out of the doldrums. Worries like that have tempered investor enthusiasm, resulting in the recent down performance of the U.S. markets.
For seven years, the Federal Reserve had kept interest rates at near zero to encourage growth and pull the economy out of the recession. Now that the U.S. economy appears back on track, the Fed is likely to gradually raise interest rates, which is certain to put pressure on bank stocks. This resulted in numerous stocks heading south, such as Goldman Sachs, which dropped 3.9 percent to $175.49, a $7.12 drop.