The Dow Jones Industrial Average and other major stock indexes jumped as President Trump declared a national emergency to deal with the coronavirus pandemic.
The worry is that bankers, traders and big funds might suddenly find themselves out of cash. Such a scenario could create an ugly spiral throughout the economy.
The Dow Jones Industrial Average fell nearly 10% — its biggest one-day drop since 1987 — as the coronavirus pandemic continued to rattle markets. Trading was temporarily halted earlier in the day.
Analysts like to say that the stock market is not the economy. But a bear market reflects concerns and anxieties about the economy, and at times a bear market is accompanied by a recession.
Major stock indexes were down around 20% from their peaks in February, signaling an end to the 11-year bull market as investors fear the worst about the coronavirus pandemic.
Stock indexes rose nearly 5% after the market's worst day since 2008. The jump followed President Trump's call for a payroll tax cut and other steps to help the economy amid the coronavirus epidemic.
Stock indexes tumbled so fast Monday that marketwide trading was halted temporarily for the first time since October 1997. The Dow Jones Industrial Average fell 2,013 points, or nearly 8%.
Stocks continued their downward slide on Thursday, with major indexes falling 10% below their recent peaks. Investors worry about the economic toll of a widening coronavirus epidemic.
The S&P 500 has seen a nearly fivefold increase since the depths of the Great Recession. But some analysts say the bull market may have gone on too long, encouraging investors to take more risks.
GDP numbers out Wednesday show the U.S. economy lost some steam in the third quarter. President Trump is banking on a strong economy as his ticket to a second term.