Amid the US-Israel and Iran war, the American stock market Dow Jones has fallen by 2% today on March 6. Dow Jones is trading at 47,000 level, falling more than 900 points. Tech-based index Nasdaq Composite is down 1.73% and SP 500 index is down 1.74%. Nasdaq Composite is trading at the level of 22,353, falling 400 points. SP 500 index fell 120 points, it is at the level of 6,711. 5 main reasons for the decline in the American market, the top loser of the Dow Jones Index. 1. Rise in crude oil prices: Due to the increasing tension between Iran and Israel, there has been a tremendous rise in the prices of crude oil. The price of Brent crude oil has increased by 5.7% and crossed $ 90.25 per barrel. This is its highest level since April 2024. There is a fear of inflation increasing due to oil becoming expensive, due to which the sentiment of investors has deteriorated. 2. Employment in America decreased instead of increasing: According to Bureau of Labor Statistics (BLS) data released on Friday, non-farm payrolls decreased by 92,000 last month. The unemployment rate increased to 4.4% in February. This simply means that the labor market is weakening and companies are making layoffs. 3. Fear of stagflation: The biggest fear in the market is about ‘stagflation’. This is a situation when economic growth stops, but inflation continues to rise. Weak jobs data and rising oil prices have proved this fear true. 4. Hopes of cutting interest rates are over: Earlier it was expected that the Federal Reserve would cut interest rates at least twice this year, but now in view of the danger of rising inflation, traders feel that it may be cut only once this year. Higher interest rates are always negative for the stock market. 5. Weak earnings of retail sector: One reason for the decline in the market was the decrease in consumer spending. According to recent reports, the revenue of American retail companies has been much less than expected. This is a sign that the common American is now being cautious in spending. Asian market closed with a rise today, Indian stock market closed down by 1097 points, whereas Indian stock market declined today i.e. on 6th March. Sensex fell 1097 points (1.37%) to close at 78,919. Nifty also declined by 315 points (1.27%). It came to 24,450. In today’s trading, there was maximum selling in bank, realty and auto shares. There is a risk of inflation increasing in situations like geopolitical tension and war. This may reduce the profits of companies. In such a situation, investors start selling their shares and invest them in safe places like gold and silver. This causes a decline in the market. There was a decline in the American market yesterday also. What is Stagflation? When the country’s GDP is falling or is stagnant, unemployment is increasing and at the same time the prices of goods (inflation) are also increasing, then it is called stagflation. Dealing with such a situation is the most challenging for the economy of any country. Also read this news… Iran war may cause shortage of LPG: Oil companies ordered to increase LPG production; The government used emergency power. If the war between America, Israel and Iran increases, then the shortage of LPG in India may increase. In view of this situation, the government has ordered all the oil refinery companies of the country to increase LPG production by using emergency power. According to Reuters report, increasing tension in the Middle East may affect gas supply. In view of this danger, the government issued this order. It says that now refineries will use propane and butane only to make cooking gas. Read the full news…
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US stock market fell 900 points amid Iran-Israel war: trading at 47,000 points; Impact of rising crude oil prices and unemployment rate
