The New York Stock Exchange loses 4.6%, the biggest percentage decline on Wall Street since 2011

The New York Stock Exchange loses 4.6%, the biggest percentage decline on Wall Street since 2011


Wall Street closed on Monday with heavy losses when the Dow Jones index fell by 4.6%, which is its biggest percentage decline since 2011.

The main indicator of the US stock market sank 1,175 points to finish with 24,345.75 whole.

It is the strongest drop in points experienced in the history of the New York Stock Exchange in a single day.

The one on Monday exceeded, for example, the 777.68 drop recorded at the beginning of the financial crisis in September 2008, when the US Congress rejected a US $ 700 billion rescue plan following the collapse of the US investment bank Lehman. Brothers.

This new fall adds to the losses that the New York Stock Exchange registered last Friday, when the data on the increase in wages in the United States made it clear to investors that a greater spending capacity of the population can be translated into a higher inflation.

To keep prices under control, the Federal Reserve of the United States may be forced to raise interest rates, which caused the fear of investors.

The fall coincides with the oath of office of the new Federal Reserve chairman, Jerome Powell, who was elected by President Donald Trump to replace Janet Yellen.

Jerome Powell was sworn in as the new chairman of the US Federal Reserve on Monday
Copyright of the GETTY IMAGES image
Image caption Jerome Powell was sworn in as the new chairman of the US Federal Reserve on Monday

Frenzied day

The White House acknowledged its concern about the fall in the markets.

“We are always worried when the market loses value, but we also trust in the basic rules of the economy,” an official source told CNBC on Monday morning.

After the closing of the session on Monday, however, the White House preferred to emphasize again the role of Trump in front of the economy and the achievements made in the area since he assumed the presidency a year ago.

“President Donald Trump is focused on the long-term economic fundamentals(…) which remain exceptionally strong,” spokeswoman Sarah Sanders said in a statement.

“The president’s tax cuts and legislative reforms will further improve the US economy and continue to increase prosperity for the American people,” he added.

In the frantic day of Monday, the Dow Jones came to lose at the worst time of the session to 1,597 points.

Meanwhile, the selective S & P 500 closed with a fall of 4.10% and the composite index of the Nasdaq fell by 3.78%.

The main London stock index, the FTSE 100, closed with a fall of 1.46%, while the most important markets in Asia fell between 1% and 2.5%.

This dramatic fall on Monday in the Dow Jones breaks with months of consecutive rises In January, it exceeded the level of between 25,000 and 26,000 points in less than a month.

Analysis by Anthony Zurcher, BBC North America

Boasting of stock market gains is a dangerous game that most presidents avoid playing. Barack Obama did it from time to time, but only after the country’s economy recovered significantly from the damages of the 2008 collapse.

However, after warning about a bubble in the market during his campaign, Donald Trump became the most important spokesman for the Dow Jones: in tweets, at rallies and even during the State of the Union address last week. That created the discordant image of the president boasting in a speech about the benefits of his tax cuts while the markets pointed down.

The US news channels, which were broadcasting live the president’s address, cut their coverage to report on this day that marks a record. It was a very visible misstep for the recent history of economic success in the country that will be hard for most Americans to forget.

The president will argue that the fundamentals of the economy are still solid. Salaries rose and unemployment decreased, possibly contributing to the fall of shares. If growth continues, this could be cataloged as another stumbling block of rhetoric by a “non-politician”.

However, if it supposes the beginning of a great rectification in the middle of the electoral year, the president’s words could come back to haunt him.

About author
Profile photo of Rava Desk

Rava Desk

Rava is an online news portal providing recent news, editorials, opinions and advice on day to day happenings in Pakistan.

Your email address will not be published. Required fields are marked *