We’re diving into why stocks are down today in our market update for Monday!
The stock market has been through rough times recently as shares continue to fall over the last few weeks. Today’s drop looks like a continuation of that as investors continue to fear rising inflation rates.
That’s due to The Federal Reserve allowing for higher interest rates after holding them off for two years. That was due to the ongoing effects of the novel coronavirus pandemic and was part of an effort to keep the economy afloat during lockdowns and supply chain issues.
It’s two years later and while the economy has recovered to a degree, those supply chain problems continue to weigh on markets. Now that the Fed is increasing interest rates, inflation is a chief concern of investors and there’s also the withdrawal of economic boosts to deal with.
George Lucas, co-CEO of fintech investment platform Raiz, said the following about why stocks are down today to Yahoo Finance.
“In my opinion, it has got a lot to do with liquidity. Towards the end of last year, as inflation increased, cash began to get more expensive. Economies began to open up and banks became more worried about inflation, worried that what we’re seeing is not transitory. These changes are now being absorbed by the equity and bond markets and have contributed to the recent sell-off in global bonds, a sell-off in technology stocks and a sell-off in shares of non-profitable companies.”
As if that wasn’t enough, now investors have to weigh out which stocks to invest in as war looms on the horizon. President Joe Biden is considering sending troops to Ukraine to combat Russia applying more pressure to the country.
While Russia has yet to invade Ukraine, the U.S. and U.K. are both looking to bolster the number of troops in neighboring countries. The goal appears to be preparing for the potential invasion with a show of force.
Investors on the lookout for more recent stock market news will want to stick around!
InvestorPlace has all the latest stock news for traders to digest. That includes what’s got Kohl’s (NYSE:KSS) stock rising this morning, the biggest pre-market stock movers for Monday, and more! You can find out all about these topics by checking out the links below!
More Monday Stock Market News
- KSS Stock Alert: What Is Going on With Kohl’s Today?
- Today’s Biggest Pre-Market Stock Movers: 10 Top Gainers and Losers on Monday
- SPWR Stock Alert: Why Did SunPower Just Hit a New 52-Week Low?
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.