• US stock market daily report (August 31, 2015, Monday)

    As the month of August creeps to a close, stocks on Wall Street are poised for their worst monthly drop in more than three years.

    On Monday, all three major indexes fell into negative territory after weekend comments from Federal Reserve Vice Chairman Stanley Fischer appeared to keep the door open for a rate hike in September.

    Into the early afternoon trading session, the Dow Jones Industrial Average had rebounded off its low of the day, down over 57 points. The S&P 500 was off by 9 points and the Nasdaq was down by 17 points.

    The Dow is on track for its worst monthly loss since 2010, while the S&P and the Nasdaq look set to post their biggest monthly loss since May 2012.

    Wall Street's "fear gauge", the CBOE Volatility index (VIX), was higher by 4% to 27 into early afternoon trading, above its long-term average of 20. During trading turmoil over last week, the VIX spiked to as much as 53.29.

    At the global central banking conference in Jackson Hole, Wyoming, Fed Fischer said U.S. inflation would likely rebound as pressure from the dollar fades, allowing the Fed to raise interest rates gradually. Fischer added that the Fed could look beyond a week of stock market turmoil brought on by persistent fears that China's economy is faltering, in making their decision on raising interest rates.

    A pattern of sustained recovery in the economy is needed to be seen by the U.S. central bank, before they decide to raise rates. Inflation has remained below the 2% target of the U.S. central bank, for more than three years, while the job market has steadily improved.

    The U.S. stock market has staged a spectacular bull-run since the financial crisis, with the helping hand of a decade of near-zero interest rates.

    Fears over the health of the Chinese economy has had adverse affects on global stock markets throughout the month of August that included pressure on crude oil prices and pushing commodities lower.

    Contributed by Millennium Traders
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