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The DOW Stock Market Drop

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Zach Moroney

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Xavier students have ‘played’ the stock market in order to better understand it in Wall Street and the History of Economic Markets. Imagine if shares were real on February 5th, 2018, when the DOW stock market faced a decline of more than 1500 points. Fortunately, buyers were able to soften the damage that came to an overall plunge of 1,175 points. This was considered the DOW’s biggest decline on record with the amount dropping to 4.6 percent. However, the DOW proceeded to rebound approximately 300 more points on Friday, February 9th. This helped repair some of the huge amounts of losses that the investors faced. It is believed the cause of this gigantic point drop was due to the variety of factors including increased wage growth which eventually led to increased fears of Federal Reserve interest rate tightening, bond yields, and a weakening dollar value.

It was noted by many sources, however, that this was not a market crash, in fact. Crashes have been more commonly defined as an abrupt and rapid decline of at least 20%. With concerns about inflation and interests rates, many say that we should not panic and see this as a bigger picture opportunity for those with extra investment money. It has also been noted that the bond market, which is backed by the US Treasury, hit a 4-year-high not too long ago which forced the Treasury to borrow money that will allow bonds to be set into motion.


Overall, the DOW has hit its worse decline in history. However, it is on a steady rebound and the market investors have been informed not to worry. Market analysts assure us that our economy and employment rates will continue to grow.

photo by: Lalala666

 

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Stocks went into free fall on Monday. “Dow Plunges 1,175 — Worst Point Decline in History.” CNNMoney, Cable News Network, money.cnn.com/2018/02/05/investing/stock-market-today-dow-jones/index.html.

Franck, Thomas, and Alexandra Gibbs. “Dow Bounces More than 300 Points Friday, but Still Posts Worst Week in 2 Years.” CNBC, CNBC, 9 Feb. 2018, www.cnbc.com/2018/02/09/us-stock-futures-dow-data-earnings-market-sell-off-and-politics.html.

Bryan, Bob. “The Market’s Wild Moves Show Why It’s a Terrible Idea for Trump to Tie His Success to Stocks.” Business Insider, Business Insider, 6 Feb. 2018, www.businessinsider.com/dow-jones-sp-500-stock-market-drop-why-trump-should-stay-away-2018-2.
money.cnn.com/2018/02/08/investing/why-dow-is-down/index.html.
fortune.com/2018/02/05/stock-dow-bitcoin-market-crash/.

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