The Dow Experiences The Biggest One-Day Plunge In History
By: Stacy Omosa
Today, the Dow Jones Industrial Average plunged 1,175 points at closing. This is the DOW’s biggest one-day point decline in history. The White House press stated ,“the President’s focus is on our long-term economic fundamentals, which remain exceptionally strong, with strengthening U.S. economic growth, historically low unemployment, and increasing wages for American workers,” White House press secretary Sarah Huckabee Sanders said in a statement, “The President’s tax cuts and regulatory reforms will further enhance the U.S. economy and continue to increase prosperity for the American people."
Normally, administrations wouldn’t comment on the current state of the stock market. However, Trumps economic achievements in office could be undercut by how horrible the DOW is doing today and in the future. Treasury Secretary Steven Mnuchin declined to answer specific questions but offered this, “the President is delivering on his promise to provide relief to middle-income families, make American businesses more competitive, and grow our economy.”
Since the American Dow tanked today, markets in Europe and Asia took a hit as well. The Hong Kong Hang Seng Index dropped by 4 percent and the European Stoxx fell by 1.5 percent.
It’s unclear what is the direct cause of the hit, but a few possible reasons are the rising wages and political instability the Nunes Memo caused last week. The Labor Department reported Friday that wages had gone up 2.9 percent and were growing at a fast rate. Increased wages means lower profits which investors aren’t fond off. Another thing investors aren’t fond of is political instability. With the Nunes Memo released, the administration and both sides of Congress have been at war, with some suggesting more acts to discredit the FBI investigation into Russia could lead to a constitutional crisis.
Daniel Wiener, chief executive of adviser Investments, suggests that the plummet was “crowd psychology at its best.” He explained, “investors had the weekend to worry about what happened Friday, and they sold on Monday. This is normal, every day stock market volatility. And its healthy.”