Stocks tumble on falling oil, China, Fed rate hike fears
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The countdown to the Fed's first interest rate hike in a decade is nearing. Adam Shell with America's Markets. USA TODAY
The U.S. stock market crumbled Wednesday under the weight of a new 6 1/2-year low in oil prices, more volatility in Chinese stocks and rising angst on upcoming interest rate hikes.
Investors were anxiously awaiting the release of the minutes from the latest Federal Reserve meeting at 2 p.m. ET Wednesday for clues on the timing of interest rate hikes. Many economists think rates could increase as early as September, but some say recent market volatility overseas could push the hikes back.
At 1 p.m. ET, the Dow Jones industrial average was down 170 points, or 1.0%. The Standard & Poor’s 500 index dropped 0.9% and the Nasdaq composite index fell 0.9%.
The losses were broad-based as all 10 sectors of the S&P 500 fell. The energy sector was the hardest hit as oil prices tumbled about 4.5% after a government report showed that U.S. crude stockpiles increased. U.S. benchmark crude was trading down $ 1.93 to $ 40.69 at 1 p.m. ET.
Markets were also on edge as stocks in China were volatile for a second straight session with the Shanghai composite index slumping as much as 5% before recovering to finish up 1.2%. That comes a day after a 6.2% plunge — China’s biggest decline in 3 weeks — helped drag global markets lower.
Last week, China’s dramatic devaluation of the country's yuan currency led to global stock market turmoil and analysts say investors are fearing the yuan may be devalued further.
Other Asian markets dropped: Japan's Nikkei 225 index fell 1.6% while Hong Kong's Hang Seng index lost 1.3%.
European shares were sharply lower Wednesday, with Germany's DAX index 2.1% lower, France's CAC 40 down 1.8% and Britain's FTSE 100 index 1.9% lower.
U.S. stocks were lower Tuesday as investors reacted to an earnings miss from retail giant Walmart.
Contributing: Jane Onyanga-Omara, Associated Press
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