Fear of working class upsurge triggers plunge in financial markets
3 February 2018
Increasing volatility on US and world stock markets erupted Friday in a steep decline in stock prices, led by a 665-point drop in the Dow Jones Industrial Average. The 2.54 percent fall in the Dow, the biggest single-day decline since June 2016, was accompanied by similar drops in the other US stock indexes and a broad sell-off on European markets, topped by a 1.68 percent decline in the German DAX index.
With Friday’s plunge, the major US indexes posted their worst weekly performance in two years. The financial press tied the stock sell-off to rising interest rates on US government bonds and the jobs report for January, released on Friday, which showed a 2.9 percent year-on-year increase in average wages, the biggest rise since 2009.
It remains to be seen whether Friday’s sell-off is the beginning of the implosion of asset bubbles about which a growing chorus of economists has warned. But whatever the immediate fate of the markets, there are many indications that the increased volatility marks an inflection point in the world economic and political crisis of capitalism.
It takes place amidst a confluence of factors, at the center of which are clear signs of a resurgence of working class struggle on an international scale. The American ruling class reacted with alarm to the modest increase in wages in January because it is seen to be connected to a growth of working class militancy and a determination to win back what has been taken away in wages, jobs and living standards over the past four decades.
The US jobs report came in the midst of a resurgence of working class resistance across Europe. Hundreds of thousands of German industrial workers are striking to reverse decades of austerity…