Fear Among US Investors Is Increasing, Here's Why

The CNN Money Fear and Greed index remained in the "fear" zone, following the release of jobs report for the month of August.

U.S. markets opened higher on Friday after payrolls data for August showed higher-than-expected hiring, but unemployment rate increased to 3.7%. However, gains were erased after Russia’s Gazprom announced an indefinite shutdown of the Nord Stream 1 pipeline to Europe, which was earlier projected to reopen on September 3 if no anomalies were found.

Investors were also concerned after China announced on Thursday that it would declare a state of emergency in Chengdu, a prominent southwestern province. Some 21 million residents will shelter in place amid a new COVID-19 outbreak, according to South China Morning Post (SCMP).

The Dow dipped 1.07% to close at 31,318.44 on Friday. The S&P 500 fell 1.07% to 3,924.26, while the Nasdaq Composite declined 1.31% to settle at 11,630.86 in the previous session, following a decline in stocks, including Apple Inc. AAPL and Meta Platforms, Inc. META.

At a current reading of 41.0, the index remained in the "fear" zone, following a previous reading of 44.0.

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.