Updated 03:45 AM EDT, Mon, Jun 14, 2021

US Stocks Plunges Again After Strong Opening

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Things were looking bright for the U.S. stock market until the last hour of trading Tuesday. U.S. stocks took a dive late Tuesday, which brought about an air of uncertainty to markets that is set to be on the state of recovery.

According to Buzzfeed News, it was by far the worst day for U.S. stocks in four years as all major indices opened up but took a plunge in negative territory at the end of the day. The trend added to many investors' anxieties about a steady Chinese slowdown.

As per a report with Bloomberg, this trend in the stock market would ultimately spell trouble for states like California who rely on capital-gains taxes. This makes the state vulnerable to shifts in equity markets.

"Before the last week-and-a-half or so, states have been in the best relative fiscal health since the end of the Great Recession," said fiscal program director Arturo Perez in the report for Bloomberg,  "This is a big game of wait-and-see." 

The setback, which came as a surprise was reported by Buzzfeed to have dropped the Dow Jones industrial average by more than 650 points. It was a terrible week for investors who saw the rise and decline coming from several days of taking a beating in Chinese stock markets.

As Chinese stocks continue to take a tumble, Associated Press reported that China's cenral bank said it would cut interest rates in a move to shore up the slowing growth. The People's Bank of China cut its lending rate to 4.6 percent and its one-year deposit rate to 1.75 percent. China hopes to increase liquidity by lowering the minimum reserves effective September 6.

"The main goal of cutting rates is to support the healthy development of the real economy," the bank said in a statement, as reported by Associated Press.

For a while, it seemed to give US markets a light of hope. However, lingering fears about a slowdown was quick to shut down confidence in the market as Wall Street went back into selling mode. Even expert financial analysts admit that the move might not be enough to rescue the stock market. 

"Even though it's a positive signal for the stock market, it won't change anything," said Wu Xianfeng, President of Longteng Asset Management in a report with The Washington Post,  "The move is far from being enough to erase the market's panic." he continued. 

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