NEW YORK – The growing coronavirus emergency led markets to their worst slide since Black Monday in 1987, extending the decline that has erased most of the gains Wall Street has recorded since Donald Trump took office. presidency.
The S&P 500 fell 9.5% for a total loss of 26.7% from its all-time high, reached just last month. That placed the market within the 20% threshold to be considered a bear market, officially ending the bullish period that spanned almost 11 years. The Dow Jones Industrial Average dropped 10% for its worst day since its 23% crash on October 19, 1987.
European markets lost 12% for the worst session in its history, even after the European Central Bank promised to buy more bonds and offer more aid to the economy.
The sensitive losses occur amid a series of cancellations and closings across the world – including Trump’s order to suspend most travel from Europe to the United States – and mounting concerns that the White House and governments The rest of the world cannot or will not counter the economic damage caused by the coronavirus pandemic in the near future.
“We are beginning to realize how severe the impact on the economy will be. The news is getting worse instead of better on a daily basis,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.
Shares fell so precipitously as they logged into Wall Street that they halted trading for 15 minutes for the second time this week. These automatic interruptions were first implemented after the 1987 crash, and until this week they had not been used since 1997.
The Dow took an upward trajectory for an instant and cut its losses in half after the Federal Reserve announced it would intervene to alleviate “extremely unusual disruptions” in the bond market. But the momentum dissipated quickly.
Trump often prides himself on the huge gains on Wall Street during his rule, and last August warned a crowd that “they can love me or they can hate me, but they have to vote for me,” or else his retirement plan. “It will go down a tube.”
Just last month, the Dow enjoyed a nearly 50% gain since Trump took office on January 20, 2017. At Thursday’s close, the Dow was holding on to a 6.9% profit, although it still has a growth of almost 16% compared to shortly before Trump’s election in November 2016.
The Dow officially entered the bear market on Wednesday when the day ended with losses of over 20% from its all-time high. As for the S&P 500, it is the fastest crash from its all-time high since World War II.
Oil continued its devastating week, with benchmark US crude closing at $ 31.50 a barrel.
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