US stocks tumble, DOW sheds 1.3%

US stocks fell amid a highly volatile movement. Heavy losses were seen in the indices and with the downward move, the Nasdaq and the S&P 500 added to the steep losses posted in the previous session. The major averages all ended deeply in red. The Dow lost 1.3% while Nasdaq fell 0.7% and the S&P 500 lost 0.8%. The US treasury yields moved up from four month lows as markets assessed the overall economic cues and political landscape. US markets also seemed to be linked to the concerns over chip-related companies.

Meanwhile, the IMF noted that US economy has turned in a strong performance over the past few years. Hysteresis effects from the pandemic did not materialize and both activity and employment now exceed pre-pandemic expectations. Real incomes were diminished by the unexpected rise in inflation in 2022 but have now risen above pre-pandemic levels. Job growth has been particularly fast with 16 million new jobs created since end-2020. However, income and wealth gains have been uneven across the income distribution and poverty remains high, particularly following the expiration of pandemic-era support. The outlook is for a continued healthy rate of growth with balanced risks around the baseline forecast, says the IMF.

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