The Dow Jones Industrial Average fell by 1.6% on October 27th, due to the lack of a Brexit deal and the Budget 2022.
The Dow Jones Industrial Average dropped by 1.6% on October 27th, hitting its lowest point since July 2018. The fall was blamed on the lack of a Brexit deal and Chancellor Rishi Sunak’s failure to provide any positive news in his budget announcement.
What is the Dow Jones Industrial Average?
The Dow Jones Industrial Average is an index created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. It tracks 30 major companies traded on the New York Stock Exchange (NYSE) and NASDAQ, which are weighted based on their market capitalization (the value of their outstanding shares). The average is updated every time one of these companies reports earnings or makes a significant move in price.
Why did stocks fall today?
“Brexit”
In late 2018, Prime Minister Boris Johnson held a vote in Parliament that resulted in MPs rejecting his plan for leaving the European Union (EU). As part of this plan, he wanted to take Britain out of the EU without an agreement with other countries about future trade relations. This would mean that Britain would not have access to some services currently provided by EU countries such as emergency health care for British citizens traveling abroad or certain financial services.
A second vote was held on January 15th 2019, but it ended with similar results.
In order to prevent another vote from taking place before Britain leaves the EU in October 2021, Johnson announced that there would be no more votes until after Brexit has taken place.
Today’s drop was caused by fears that this “no-deal” Brexit will still happen despite Johnson’s promise.
