Investors were seeing red again – lots of it – on Monday, as the global equity selloff that began last week has shifted to the forefront of the market’s mind.
The Dow Jones Industrial Average fell as much as six per cent, or more than 1,500 points, before making up some of the volatile losses later in the day. The index ended the day with an 1,176 point loss at 24,344, or 4.6 per cent. The S&P 500 declined 113 points to 2,648, or 4.1 per cent, marking its worst decline since August 2011.
While the lengthy bull market in stocks, coupled with high valuations in many sectors, gives investors plenty of reason to pare back their exposure, it’s the bond market that is taking much of the blame.
Friday’s stronger-than-expected U.S. wage growth data exacerbated concerns that had already emerged due to the spike higher in global bond yields.