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Massive US stock market plunge hits Australia

The US stock market is in chaos, experiencing one of the largest one-day falls since the Global Financial Crisis in 2008.

The Dow Jones fell by 1,175 points, closing down 4.6% on Monday.

Macquarie Radio’s Financial Editor and Host of Money News, Ross Greenwood, tells Ray Hadley why the plunge occurred and what impact it will have here.

“It is serious, it is fairly significant. It follows a 2.5% fall when the Dow Jones fell 650 points on Friday.

“They were expecting… 2.7% wages growth for Americans. That number came in at 2.9%. You wouldn’t imagine it would make much difference.

“But because wages are growing faster than what the market was expecting, all of a sudden anticipation of higher interest rates came in and… people started to worry about the effect of those higher interest rates.

“It didn’t take much for a crack in the confidence to happen.”

The Australian market lost about 1.6% or $30-billion on Monday, with Ross predicting further losses today.

“We live in a globalised world so if the United States falls, commodity prices fall, oil prices as well. So as a result the Australian stock market goes with all the rest of the stock markets around the world.

“Our falls probably have been nowhere near as bad as the United States.

“Part of the reason for that is because the run of our stock market has been nowhere near as stellar as the United States… fuelled by the tax cuts Donald Trump has handed out.”

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