Major U.S. indexes faced a significant slump on Tuesday, with financial stocks taking a hit and concerns over China’s struggling economy weighing heavily on investors’ minds. European markets also saw mostly negative performances, although Italy’s FTSE MIB managed to end the day in the green. This week brings potential trouble for the U.S. banking industry as Fitch Ratings warned of a possible downgrade of its credit rating, causing major banks like JPMorgan Chase and Bank of America to have their ratings cut. However, there was some positive news for the U.S. economy as data from the Commerce Department showed strong consumer spending in July. In an attempt to stabilize its falling currency, the Russian central bank raised interest rates in an emergency meeting. Lastly, a Bank of America survey revealed that investors are becoming overconfident, which may pose a risk as the stock market rally starts to lose steam.
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