The Dow Jones Industrial Average index tumbled 1,175 points, or 4.6% to close down at 24,345.75. This is the largest market drop in years.
The White House moved to reassure investors saying it was focused on “long-term economic fundamentals, which remain exceptionally strong”.
Signs of improvement in the economy had driven US markets to record highs.
“The drop on the Dow was closely followed by the wider S&P 500 stock index, down 4.1% and the technology-heavy Nasdaq, which lost 3.7%.”
Ever since he was elected in November 2016, President Donald Trump has tweeted a number of times about the increase in US stock markets, using the gains since he took office to illustrate market improvement.
The analyst said:
Economic news from the US has been stronger than anticipated.
So, perversely, the market correction has been caused by positive economic news.
Monday’s decline is the largest decline in percentage terms for the Dow since August 2011, when markets dropped in the aftermath of “Black Monday” – the day Standard & Poor’s downgraded its credit rating for the US.
Investors are reacting to changes in the outlook for the American and global economy, and what that might mean for the cost of borrowing.
The stock market sell-off accelerated on Friday when the US Labour Department released employment numbers which showed stronger growth in wages than was anticipated.
Asian indexes tumbled and U.S. stock indexes fell on Tuesday following massive losses seen stateside in the last session.
Asia is all red for a second day with frantic sell-off in equity markets; Pakistan followed the global trend after it’s off day on Monday.
In Pakistan, the KSE-100 index fell down 803 points. PSX’ Benchmark KSE-100 Index opened the day with a steep fall after it lost more than 700 points at the outset.
The Index is down 1.64%, with Commercial Banks, Oil & Gas Exploration Companies, and Fertilizer stocks taking away most of the points.