Monday’s market selloff and continued declines on Tuesday come on the heels of troubling economic data across the world’s major economies.
Chinese markets have plunged in response to a purchasing managers’ index (PMI) that fell to 51.1 in May from 51.8 in April, a nearly 3 percent drop. Anything above 50 still indicates expansion, but such a weak reading risks shutting down the largest engine of growth in the world economy. The May PMI reading marks a 10-month low. Chinese stocks have now fallen four straight days, with the Shanghai Composite losing 9.5% of its value, just half a percentage away from a technical correction.