Which 2011 market turmoil was intensified by the U.S. credit-rating downgrade to AA+?
Answer
2011 stock market sell-off
The 2011 stock-market sell-off was intensified by the U.S. credit-rating downgrade to AA+.
In August 2011, investors worried about the political dispute over raising the United States debt ceiling and about slowing economic growth in the United States and Europe. Standard & Poor’s downgraded the United States’ long-term sovereign credit rating from AAA to AA+ on August 5.
The Dow Jones Industrial Average fell sharply over the following sessions, including a 635-point decline on August 8. Markets were also affected by the euro-area sovereign-debt crisis and fears that the global recovery was losing momentum.
This episode is sometimes described as a crash, although it was a volatile sell-off rather than a single universally defined crash day. It should not be confused with the 2010 flash crash, which was a rapid intraday event linked to market microstructure and automated trading.