Mubasher: A day of turbulence on Wall Street was merely a correction, not an indication of a broader “systematic issue,” US Treasury Secretary Steven Mnuchin said.
“Markets are not efficient and markets move in both directions and at times they overshoot in both directions,” Secretary Mnuchin told Bloomberg on Thursday in an interview on the sidelines of the International Monetary Fund (IMF) annual meetings in Bali, Indonesia.
Fundamentals of the US economy are still “extremely strong” which caused the equities to perform well as before, Mnuchin said.
“The fact that there’s somewhat of a correction given how much the market has gone up is not particularly surprising,” he added.
A trade dispute with China and rising interest rates have thrown a shudder of fear among investors, which led to a wide US stock market sell-off, with the S&P 500 slipping to the lowest level since last February.
Investors were concerned that trade war dampened profit outlook, amid mounting signs that US companies would not see their earnings growing in the third quarter.
The Dow Jones Industrial Average lost 831.83 to 25,598.74 points on Wednesday.
Wall Street turmoil has echoed into Asian markets earlier on Thursday, as benchmarks from Tokyo to Hong Kong slipped more than 3%.