The New York Stock Exchange indexes ended the last session of the week with declines. Dow Jones wiped out 7% of its value in the past five days, which also emerged as the worst weekly series of indicators since the financial crisis in 2008.
The decision of US Federal Reserve to continue with tightening the monetary policy and gradually raising benchmark interest rates was the main reason for the serious stock exchange losses during the week. The situation worsened by the refusal of the US President Donald Trump to sign the bill on the short-term budget.
The blue-chip index Dow Jones Industrial Average fell 353.33 points Friday trading session, ending the day at 22,506.27 points. The broader S&P 500 dropped by 45.16 points, or 1.83%, ending the session at 2,422.26 points.
The technology index Nasdaq Composite fell by 183.54 points, or 2.81%, to 6,344.87 points, with shares of Facebook and Apple falling by 7.3% and 4.2% respectively, while the stock price of Amazon dropped by 6.2%.
Meanwhile, the stocks of the sportswear company Nike rose by more than 7% after a strong quarterly financial statement.
Investors’ focus has also been the news of the growth of the US economy. It grew by 3.4% in the third quarter, which failed to cover analysts’ forecasts. The growth of the US economy is expected to slow down in the fourth quarter of 2018.
The US Department of Commerce said today that gross domestic product (GDP) growth was revised downwards from a previous 3.5% growth estimate. In the second quarter, the indicator was at 4.2% and in the first quarter 2.2%.
In the bond markets yields on 10-year bonds dropped to 2.785%, while 30-year US government bonds rose to 3.026%.
US Federal Government partially stopped work
The US Federal Government partially halted work after a fierce debate over President Donald Trump’s demands for government funding and adding 5 billion USD to build a wall on the border with Mexico.
After failing to reach a budget deal on Friday, the leaders of the Congress and the White House decided they would continue their talks over the weekend in an attempt to reach a decision, rather than stopping the government’s work before the Christmas holidays.
Donald Trump refused to agree to sign the short-term budget bill because it did not include the funds to build the wall.
The US House of Representatives, where Republicans have a majority until the Democrats do not take control on January 3, adopted a bill that included 5 billion USD, but it remained blocked in the Senate, and the work of the federal government was blocked since midnight on Friday.
After it became clear that the House House document did not include the required number of votes to pass, the Senate leaders met with Vice President Mike Pence and other White House representatives in an attempt to find a way forward.
They failed, and the deputies in the two Chambers of Congress were sent home.
Donald Trump tried to accuse the Democrats.
“The Democrats, whose votes we need in the Senate, will probably vote against Border Security and the Wall even though they know it is DESPERATELY NEEDED. If the Dems vote no, there will be a shutdown that will last for a very long time. People don’t want Open Borders and Crime!”, wrote Donald Trump on Twitter.
About three-quarters of federal government programs are funded by September 30 next year, but the funds for everyone else, including the Departments of Security, Justice and Agriculture, have expired at midnight on Friday.