Friday, 16 April 2021 01:55 GMT

The external factors impacting the stock market in the US


(MENAFN - MENAFN Authors)


As one of the largest global contenders, the US stock market holds a significant amount of weight in the investment world, in which any minor impact can have a major effect on the global economy. As of 2019, the US stock market was doing increasingly well with record highs and 20% gains. This can particularly be attributed to a portfolio of good companies and interest rates being at an all time historic low. In addition, when it comes to stock trading, there’s no shortage of stocks to choose from, especially when the US is home to one of the oldest and largest stock exchanges, The New York Stock Exchange. Below, we’ll take a look at some of the best stock markets in the US and the factors impacting them right now.


What are the major stock markets in the US?

There are three main contenders in the US stock market, with the first undoubtedly being the New York Stock Exchange. Referred to by New Yorkers as the ‘Big Board’, the NYSE is one of the oldest and most prestigious stock markets, with roots dating back to colonial times. Starting out with only 30 stocks, today the NYSE is thriving and is considered to be the most highly traded stock of today.


The AMEX (American Stock Exchange) is the second most powerful contender in the US stock market, however it’s slightly more unique in the way it trades with mainly SME’s. The AMEX is owned by only its members and is well known for being home to an innovative range of products.


The third most powerful contender in the US stock market is the NASDAQ. Based, on market capitalisation, the NASDAQ is the world’s second largest stock exchange and is home to the majority of tech stocks. Listing approximately 3200 companies, the NASQAD trades more shares per day than any other market.


Other major stocks in the US include the S&P 500, Dow Jones, NYBOT, BSE and CBOE, to name a few.


The current situation for stock exchanges

Whilst the US stock market seemed to reach all time highs in 2019, 2020 has been off to a rocky start with the Dow Jones stock exchange dropping by 7.79% and the S&P 500 plunging 7.6% as the financial and energy stocks took a hit.


One of the major factors affecting the US stock markets currently is undeniably the global pandemic, as Coronavirus proceeds to disrupt global supply chains. In light of this, it seems investors are currently seeking out safer assets, which will no doubt have consequences for the likes of NASQAD, which is home to a lot of start-ups.


An additional factor to disrupt the US stock market has been the on-going turmoil in the Middle East, with uncertainty first being cast over the safety of oil tankers travelling through the straight of Hormuz, and most recently, the assassination of Iranian General, Qasem Soleimani, which further threw the world into political unrest.


None the less, as Chief Global Market Strategist at Invesco, Kristina Hooper states, ‘“When there’s panic, there tends not to be accurate pricing of assets”. There’s no doubt that 2020 has kicked off to a rocky start in not just the US but also global stock markets, however if Kristina Hooper’s words are anything to go by, we may soon come out on the other side with little more than a scratch.

 

 

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