Financial titans celebrated with world leaders in Davos last month as global markets soared. Ten days later and trillions of dollars have been wiped from the stock market in the worst crash on Wall Street since 2008.
Following Monday’s U.S. bloodbath, all major markets in Europe fell by more than 3 percent in early trading Tuesday. In Asia, Japan, Hong Kong and Korea all suffered similarly heavy losses.
In Australia, $71 billion was wiped off the stock market in just two days.
The losses were expected, in the wake of the biggest-ever point drop for the Dow Jones Monday, which erased all gains made in 2018. The Dow fell 4.6 percent while the wider S&P 500 fell 4.1 percent.
Economists are scrambling to explain the sudden dip, which follows an unprecedented period of sustained gain that saw the Dow rise 25 percent in 2017.
Some have pointed to the change in leadership at the Federal Reserve, while others suggest an overdue correction to the market.
“There have been plenty of warnings over the past few weeks that equities were overvalued and that US stock markets in particular were overheating,” Jacob Deppe, head of trading at online trading platform, Infinox, told the Guardian.
Here’s what’s happening around the world:
- Europe — In the U.K., the FTSE 100 fell by 255 points, more than 3.2 percent on opening. This was mirrored by falls in Germany, France, Italy. There has been some recovery, but the entire continent remains in the red.
- Australia — The benchmark ASX 200 index fell throughout Tuesday, ending the day 3.2 percent down on 5,833 points. Almost every listed stock posted losses. Tuesday’s trading caps off a month of downward trends, with the market losing 5 percent in the last 30 days.
- Asia — Japan’s Nikkei 225 index fell as much as 7 percent during the day, before closing 4.7 percent down and erasing all gains made in 2018 so far. Both Hong Kong’s Hang Seng and Taiwan’s Taiex were down 5 percent, while South Korea’s benchmark Kospi index dropped about 2.5 percent.
- U.S. — Following Monday’s huge sell off, expectations are for a similarly black Tuesday, with early futures suggesting the Dow would fall by another 2.3 percent. However, with four hours to go until the bell, the Dow looks set to open relatively flat, while the S&P could open slightly up. Though it won’t help regain Monday’s losses, a gain could calm fears that a longer-term crash is brewing.
Cover image: A man walks past an electronics stock indicator showing share prices at the Tokyo Stock Exchange in Tokyo on February 6, 2018. (BEHROUZ MEHRI/AFP/Getty Images)
This article originally appeared on VICE News US.