The market is down due to several key factors:
- In the U.S., stocks fell as investors reacted to better-than-expected jobless claims, which reduced expectations for Federal Reserve rate cuts in October, raising concerns about slower economic growth and persistent inflation. This caused declines especially in tech and communication stocks, with notable drops in companies like Nvidia, Broadcom, Alphabet, and Meta. Added worries about a possible U.S. government shutdown also contributed to market caution.
- In India, the stock market faced a fifth consecutive day of decline driven by selling pressure in IT and auto shares, foreign fund outflows exceeding ₹9,000 crore, and uncertainty over U.S.-India trade talks that could impact Q2 GDP growth. Concerns over high market valuations, weak global cues including geopolitical instability, and lack of fresh positive triggers have weighed on sentiment. The Russia-Ukraine conflict escalation also adds to uncertainty.
- Overall, investor sentiment remains cautious amid mixed economic data, geopolitical tensions, and uncertainty about future monetary policy, leading to broad-based selling and downward pressure on benchmark indices like Dow Jones, S&P 500, Nasdaq, BSE Sensex, and Nifty 50.
Thus, the current market downturn reflects a combination of economic data surprises, Fed policy uncertainty, geopolitical risks, and sector-specific weaknesses impacting investor confidence globally and in India.
