August was a tough month for investors. Concerns about a slowing Chinese economy and uncertainty around the Federal Reserve’s interest rate hike plans led to a significant drop in stock values. Despite some attempts to recover, the Standard & Poor’s 500 index ended August down by 6.3 percent, its worst performance since May 2012.
The trouble started mid-month when China unexpectedly devalued its currency to boost its economy. Instead, this move backfired as investors around the world saw it as a signal of weaker-than-expected growth in the world’s second-largest economy. The situation worsened with a sharp fall in Chinese stocks, spreading worry across Asia, Europe, and the Americas.