Monday, July 27, 2015

Stocks, oil down to start the week

Oil price chart created by London School of Economics via

In the wake of the Chinese stock market's huge dropoff Monday, investors around the globe got skittish and stock indexes worldwide suffered. The Chinese government had been offering lower interest rates to encourage more market investment, but the burgeoning bubble market began to burst and the benchmark Shanghai composite index fell almost 8.5 percent, the biggest drop in eight years.

With European stock markets also in the gutter, the Dow Jones lost 128 points Monday. China has struggled to stabilize its economy, which now ranks as the 2nd biggest in the world. With that amount of influence, any sizeable change sends ripples in markets across the globe.

Domestic U.S. oil prices also hit their lowest point in four months, falling under $48 per barrel of crude oil.  Since early 2015's oil market freefall, prices had been rebounding in recent months and American oil production again started to pick up. Current market prices would indicate the output is surpassing demand, however, as prices get cheaper.

American investors remain wary leading up to this week's Fed meeting, from which more insight is expected to emerge about a timetable for raising short-term interest rates. Whatever news arises could push markets sharply in one direction or another.