North American stock markets are on the verge of having their worst year since the global financial crisis of 2008.
On Thursday, North American markets continued to plunge, repeating a pattern of big drops in December. The Dow Jones Industrial Average fell 464 points, or just under 2%, bringing its losses for the past week alone to more than 1,600 points. The benchmark S&P 500 index has slumped 10% this month and is almost 16% below the peak it reached in late September of this year. And the technology-heavy NASDAQ composite index is down almost 20% from its record high in August, placing the index into official bear market territory.
The stock market turmoil has been so bad of late that some economists now forecast the U.S. will fall into a recession in the next few years. The S&P 500 index is on track for its first annual loss in a decade. If it finishes the year at its current level, the Dow Jones will also post its worst year since 2008.
In Canada, the Toronto Stock Exchange lost almost 1% to close at 14,138. Canada's benchmark index has lost about 15% of its value since July of this year. Oil is a big factor in the TSX's decline as the price of West Texas Intermediate crude continues to languish, down $2 a barrel on Thursday to close at $46.15 U.S. The weakness in oil briefly pushed the Canadian dollar below the U.S. 74 cent mark on Thursday, a level the loonie hasn't fallen below since early 2017.
The steep market decline is being prompted by concerns over a slowing economy and two threats that could make the situation worse: the ongoing trade dispute between the U.S. and China, which has lasted most of this year and shows few signs of easing, and rising interest rates, which act as a brake on economic growth by making it more expensive for businesses and individuals to borrow money.
The selling in the last two days came after the U.S. Federal Reserve raised interest rates for the fourth time this year and signaled that it is likely to continue raising rates next year, although at a slower rate than it previously forecast.
