It was a rough day in the markets, with the Dow reaching correction territory.
The Dow is now facing a clear correction, as it fell 4.15% today.
It lost 1,032 points, falling to 23,860.
Meanwhile, the TSX was down 1.73%, shedding 265 points to end the trading day at 15,065.
With the Dow now down over 10% from the January 26th record high, it it is now officially in a correction.
Concern over potential interest rate hikes seem to be driving the downturn in the markets, particularly as projections for the US debt continue to increase.
As noted by CNBC, “The benchmark 10-year U.S. note yield rose to 2.88 percent before sliding to 2.851 percent Thursday.”
‘”This whole correction is really about rates. It’s really about inflation creeping up. It’s really about people thinking the Fed is either behind the curve or actually has to be more aggressive,” Stephanie Link, global asset management managing director at TIAA, told CNBC’s “Closing Bell.” “That fear, that unknown is really what’s driving a lot of the anxiety,” Link said.”
Notably, there does not appear to be much of a spillover into the broader economy, as projections for growth in the US remain strong – in large part due to the personal income tax and business tax cuts recently signed into law.
In Canada, there is also concern about our deteriorating competitive position. US tax cuts and deregulation are being compared to the increasing carbon tax and higher regulatory burden in Canada. As a result, Canada’s stock market was already declining before the latest interest rate concerns in the US, and reached a nearly 5 month low after today’s decline.
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