How the Dow Jones industrial average fared on Monday

At one point during trading Monday the Dow was down 450 points and fell below the 17,000-point mark, and was briefly on pace to become the worst open since 1932. The sell-off started in Asia Monday, sparked by feeble manufacturing data and a devaluation of the Chinese yuan – turmoil that spread to Europe and the United States, The New York Times reported.

Yet signs of such weakness haven’t stopped the Federal Reserve from maintaining a forecast for four more 0.25 percentage point interest rate hikes in 2016 after lifting rates in December for the first time since 2006.

Proactive Investors Australia delivers insights on global commodity markets, along with the impact on local market sectors. Huang Cengdong, a Shanghai security analyst, said that selling accelerated as stocks sank towards the level where trading would be halted.

Another hurdle is the approach of the Q4 earnings season, which will get its unofficial start on January 11 when Alcoa (AA) reports.

January has been the best month for the Nasdaq composite index since 1971. Huang said: “The market will not improve because there will be heavy selling in the near future”.

U.S. data was also not encouraging, with factory activity shrinking unexpectedly in December, according to the Institute for Supply Management.

Figures released earlier on 4 January showed the Caixin/Markit manufacturing purchasing managers’ index (PMI) fell to 48.2 in December 2015, marking the 10th consecutive month the index has remained below the 50 threshold that indicates expansion. While oil prices at first rose due to conflict in the middle east, it soon lost all its gains and actually declined slightly later in the day.

Britain’s benchmark index suffered its worst new year start in 16 years. Bonds have rallied as there is more demand for safe assets. USA stocks sold off as a rout in China’s stock market sent investors into havens and out of risky assets, such as equities. Volatility will continue to dominate the market this year.