Weak economic indicators of Europe are exerting negative pressure on the US stock market, which does not have a clear trend because of that. Thus, Dow Jones slid 1.97% and lost more than 300 points. Meanwhile, S&P 500 fell 2.07% and NASDAQ Composite edged down 2.02%. That was the largest decline over the past three years. Investors keep being nervous amid slight recovery of Europe and a great risk of global deflation.
The Federal Open Market Committee worried about the low growth of European economic indicators. “Some participants expressed concern that the persistent shortfall of economic growth and inflation in the euro area could lead to a further appreciation of the dollar and have adverse effects on the U.S. external sector,” the minutes said.
The FOMC members are warily watching the rising pressures of the enhanced dollar on the national economy: as a result, the forecast on economic growth was reduced. Moreover, some Fed officials said that the weakness in Europe would lead the dollar to strengthen too much. The central bankers also fretted about slower growth in China and Japan as well as unrest in the Middle East and Ukraine.