Stocks Plunge As Investors See Signs Of A Slowing Global Economy

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The Dow had its worst drop this year.

JOHANNES EISELE/AFP/Getty Images: The Dow Jones Industrial Average on Wednesday had its worst performance this year after the bond market showed a troubling sign that a global recession may be forthcoming.Investors are nervous after the yield on 10-year U.S. Treasury bonds dipped below the yield on two-year bonds—a usually reliable indicator of a recession called the “inverted yield curve.”

Also spooking investors: The German economy shrank in the second quarter and Chinese industrial production has slowed, according to: The yield curve has already inverted this year between 10-year and three-year bonds, another sign of a recession that worried investors. But this is the first time since 2007 that the two- and 10-year-yield curve inverted.

The ominous news from Germany and China was enough to sour some of the optimism seen in the markets yesterday after President Donald Trump said he would delay a set of tariffs on Chinese imports.

 

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