26.02.202110:23 Forex Analysis & Reviews: US stock markets slump after fleeting euphoria

According to the data, US exchanges showed a sharp decline in the correction at the close of trading on Thursday.

Exchange Rates 26.02.2021 analysis

The Dow Jones Industrial Average sank by 1.76% to 31400.50 points, the broad-based S&P 500 index fell by 2.45% to 3829. 25 points, and the high-tech NASDAQ fell by 3.52% to 13119. 43 points.

Exchange Rates 26.02.2021 analysis

The reason for such frightening negative dynamics of the US stock markets was inflation concerns and data on domestic statistics of the country. In the fourth quarter, the gross domestic product of the United States increased by 4.1% on an annualized basis. This figure was higher than the first estimate of growth of 4%, but lower than the analysts' forecast of growth of 4.2% in terms of the year.

Meanwhile, the Department of Commerce left the estimate of the decline in the GDP of the United States in 2020 unchanged – at the level of 3.5%. The drop in the performance of the world's largest economy last year was the largest since 1946, when they fell by 11.6%. In addition, this is the first drop in the country's gross domestic product for the year since 2009, when it sank by 2.5%.

Internal statistics on the US labor market showed indicators that exceeded analysts' forecasts. So, the number of initial applications for unemployment benefits in the United States for the week fell to the lowest since November last year (by 111 thousand – to 730 thousand), and the rate of decline of the indicator was the largest since August of the same year.

Irina Maksimova,
Analytical expert
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