August proved to be a challenging month for investors. The looming fear of a slowing Chinese economy, coupled with uncertainties regarding the Federal Reserve’s timeline for interest rate increases, resulted in a significant decrease in stock values for the month. Despite some recovery, the Standard & Poor’s 500 index concluded August with a 6.3 percent drop, marking its lowest performance since May 2012.
This downturn began in the middle of the month when China made the surprising move to devalue its currency in an attempt to stimulate its economy. However, this decision appeared to backfire, as worldwide investors perceived it as a red flag indicating slower-than-expected growth in the globe’s second-largest economy. When this was coupled with another drastic drop in Chinese stocks, it raised concerns in Asia, Europe, as well as the Americas.
Find additional details at CBS Money Watch.
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