InvestorQ : Why did the US and European markets correct so sharply on 13 May 2020?
Anu Biswas made post

Why did the US and European markets correct so sharply on 13 May 2020?

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Neelam Naik answered.
1 year ago
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The sharp correction in the US equities on Wednesday to the tune of 2.2% was an impact of the Fed warning that the recession in the US and most parts of the world could be steeper and longer than originally anticipated. Jerome Powell’s comments came as a warning and also as a cautionary note that the US recession could be significantly worse than anything that had been seen since the Second World War. This led to a massive sell-off in equities and simultaneous safe haven buying in bonds. Obviously, the bond yields ended up sharply lower in the United States. For India it could be a double whammy as weak US markets could hit sentiments and at the same time could also result in risk-off flows out of India. Most Asian markets are already reacting negatively.

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