Multiple large firms to announce earnings on Tuesday after market turbulence
Several companies, including Facebook, Fiat-Chrysler and Sony, are set to publish their third-quarter reports today. The release comes as the US stock market has suffered a downturn with share prices falling in recent weeks.
The Dow Jones Industrial Average ended last week down 8%, or by over 2,000 points, from its most recent high at the beginning of the month. The S&P 500 was down 9%. Both indices are now in a slightly lower position than at the year’s beginning.
The falling share prices appear to be a result of rising interest rates. Last month, the Federal Reserve hiked interest rates to the 2-2.25% range, with each new hike discouraging borrowing and spending—including on stocks. Additionally, the ongoing trade war with China may have increased costs for businesses that use imported Chinese materials.
For the moment, the turbulence in the markets does not hint towards immediate broader economic distress. Indeed, share prices dipped even lower earlier this year, only to rise back up. Yet, even if there is a resurgence for the market—which good reports today could aid—the Fed’s determination to continue raising rates will likely see the market fall again when it does.
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