Stock Market Q4 Forecast: The Weight of Trade Wars May Finally Crack the Dow Jones

Stock Market Forecast:

• Stocks enter the fourth quarter with a volatile start, in an eerily similar fashion to October 2018
• Now, the major stock indices will have to grapple with divergent fundamental themes from trade wars and slowing global growth to monetary easing
• Learn the differences between the Dow Jones, Nasdaq and S&P 500

Stock Market Q4 Forecast: The Weight of Trade Wars May Finally Crack the Dow Jones

The third quarter saw global equity markets tread higher as the European Central Bank and Federal Reserve delivered on their previously-promised monetary easing. Consequently, the outlooks for growth and business spending ticked higher while investors clung to hopes that lower interest rates could stave off a broader economic slowdown. In part due to the easier policy path, the Dow Jones, S&P 500 and Nasdaq find themselves within reach of record levels despite considerable uncertainty and fear of recession.

To that end, US indices may have their work cut out for them as the market enters the fourth quarter, but many of the initial concerns remain despite accommodation from the Federal Reserve. First and foremost, the US-China trade war stands unresolved. While the two economic adversaries have shown a willingness to negotiate, it would be presumptuous to assume the talks will yield material results if history is any indication and that could eventually spell disaster for those involved…

To view the full forecast for the Dow Jones, Nasdaq, DAX 30, FTSE 100 and more, download our free Fourth Quarter Equity Forecast.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX