Stocks plunged again Monday, bringing the total value of the stock market plunging from its peak last month, as measured by the Dow Jones Industrial Average.
The index finished down 1,175 points, or nearly 5 percent on the day. At one point during the afternoon, it had fallen more than 1,500 points, the biggest one-day drop in history but not the biggest percentage drop. The drop was not large enough to trigger market circuit-breakers.
The Dow is now down more than 8 percent since hitting a record in January. Over the past 12 months, the index is still up about 20 percent.
Monday’s decline followed a sell-off Friday that analysts attributed to a stronger-than-expected jobs report that showed wages growing at the fastest rate of the recovery. The news raised investor expectations for quicker interest rate increases from the Federal Reserve, sending Treasury bond yields up and stocks down.
Brian Belski, BMO Capital Markets chief investment strategist, downplayed the past two days market movements. “This is totally normal” within the context of the long stock market recovery since the financial crisis, he said on Bloomberg.
“Good news really is good news,” he said of the strong jobs numbers.
Wells Fargo also saw a steep drop in its share prices after being slapped with major penalties by the Federal Reserve Friday night for its fake accounts scandal, with stocks dropping by more than 8 percent.
Speaking on Air Force One en route to Ohio for a tax reform speech by President Trump, White House spokesman Raj Shah said that “markets do fluctuate. Short-term we all know that.” He added that the “fundamentals of the economy are strong,” according to CNBC.
