The US stock markets closed down on Wednesday. The Dow Jones Index of Standards closed 3.05 percent lower at 25,479 points. The event also affected the Asian stock markets, which also saw falling prices: The Nikkei in Tokyo and other major stock market indices in the region went down. This is due to signs of a global recession. Fear was fueled by weak economic data, including from China and Germany, and developments in the US bond market.
There, the yield of the two-year bonds rose for the first time since 2007 and thus the times of the financial crisis over that of the ten-year Treasuries. This resulted in a so-called inverse interest rate curve, which is regarded as a sign of a recession in the financial markets. Usually longer-dated bonds pay higher than shorter-dated bonds. The background for this development is still the unresolved tariff dispute between the US and China, which has been causing uncertainty on the stock markets for months and is affecting the economy.
The skepticism of investors was also reinforced by the fact that in early Asian trading, the yield of the 30-year US bond fell below two percent, and thus for the first time below the official rate of the US Federal Reserve.
Economists and market experts nonetheless warned against hasty sales. "The reversal of the yield curve is certainly a clear warning and investors should check the resilience of their deposits - but there is no reason for panic or hasty sales," said Kerry Craig of JP Morgan Asset Management.