Why The Dow Jones Industrial Average (DJI) is Falling Today

Dow Jones Industrial Average (INDEXDJX: .DJI)

The Dow Jones Industrial Average has been declining for quite some time. However, following positive news with regard to the United States economy, the index climbed in the market yesterday. Nonetheless, we’re seeing more declines today, and this time, the declines are big. Today, we’ll talk about why the Dow Jones Industrial Average is falling so hard today and whether or not declines in the index are likely to continue. So, let’s get right to it…

Why The Dow Jones Is Having A Hard Time Today

Any time we see a decline that’s so large, it’s not hard to pinpoint the cause. Generally, there are multiple reasons, that combined, create large concerns for investors. Here’s why the Dow is declining today…

  • Global Economic Concerns – First and foremost, since it seems to be the only thing that people are talking about at the moment, the Chinese economy is struggling in a big way. In fact, a collapse in the Chinese market led to global market turmoil on the first day of trading this year. Now, more declines from the world’s second largest economy are creating concerns. However, it’s worth mentioning that China isn’t the only economy that’s struggling. In fact, there are several economies around the globe that are having an incredibly hard time. Between China, Europe, Japan, and several other economies, investors are worried about a global economic slowdown that could send the markets on a downward spiral.
  • Oil Is Also Becoming More Concerning – Oil plays a major role in the value of the Dow Jones Industrial Average. After all, the entire energy sector is dependent on the value of oil. When oil falls in value, energy struggles, and as most investors know, oil is in the midst of a drastic crisis. Unfortunately, things aren’t getting much better. As the world continues to produce more oil than it has the demand to cover, the commodity continues to decline in value. This decline is made worse by the fact that the global economy is struggling. After all, when the economy isn’t doing well, consumers look to save money, and the first thing they do is gauge their reliance on oil.

What We’re Seeing From The Dow Jones Industrial Average Today

As a result of the issues above, the Dow Jones Industrial Average is having one of the worst days that it has had in more than a year. Currently (1:15) the Dow Jones Industrial Average is at 15,849.92 points after falling 529.13 points or 3.23% so far today.

What We Can Expect To See Moving Forward

Moving forward, I’m not expecting to see much by way of positive news out of the Dow. Unfortunately, it took quite a while for the conditions that caused the index to decline to come to fruition, and chances are that it’s going to take quite some time for a recovery to happen. While central banks around the world have tried to find a remedy to economic blues, they have been unsuccessful. Also, it doesn’t seem as though the value of oil is headed up any time soon. Between these issues, I’m expecting for widespread declines to prove to be the long term trend on the Dow Jones Industrial Average as well as other indices around the world.

What Do You Think?

Where do you think the Dow Jones Industrial Average is headed and why? Let us know your opinion in the comments below!

Recommended Investing Resources
TradeSpoonTradeSpoon Details
Learn how to trade smarter risk free! Find winning trades in minutes!
Motif Investing Motif Investing Details
Get $150 free today and discover the future of investing.
Betterment Betterment Details
Simplify your investing and get great returns.

 

Photo Source