Things might be looking up in the US stock market or not as stocks closed a little higher despite a major dip early in the day.
Indeed, perhaps only a few minutes after the opening of the day—and the week—the Dow Jones Industrial Average dropped more than 500 points. The dip came after British Prime Minister Theresa May announced a delay for the Parliamentary vote on Brexit, also admitting that the policy would fail if they had maintained the scheduled vote on time. If Brussels does not agree with Britain’s goal for leaving the European Union by March, the United Kingdom could wholly leave, and that would cause major disturbance throughout the business in the Union.
The result of the Brexit vote is very important to Wall Street, of course, because it could be a distinct sign of an inevitable global economic slowdown. After all, Germany and Japan are already experiencing, at the very least, an economic contraction. China, as we know, is amid a wealth of tariffs. All in all, then, a sloppy split between the United Kingdom and the European Union is probably the last thing the global economy would want right now.
The Dow’s massive plunge brought the stock close to correction territory, dipping 10 percent below its recent high (26,828.3; on October 3rd) to nearly 24,000. And this is actually the first the Dow has crossed this threshold since June.
Fortunately, the Standard & Poors Index and the Nasdaq both jumped today (0.2 percent and 0.7 percent, respectively). While this certainly does not offset the spill the Dow Jones took, it might help with the rebounding efforts.
And speaking of the rebound, Apple was a big part of this. You may recall that Apple had announced a sell-off of phones after a Chinese court ruled to ban the sale of most iPhone models when they granted an injunction to Qualcomm. Thus, Apple announced its plan to repeal the court’s decision, insisting that all iPhone models remain available in the Chinese market.
Still, looking at all the numbers, JPMorgan estimates a 36 percent chance of recession. This is up from a 25 percent chance they estimated in September and is based on constantly changing economic data and, of course, volatile market variables.