Wall Street saw a 4.6% drop Monday afternoon, the biggest decline since August of 2011, with Dow Jones falling to a record breaking 1,175 points by the end of the day. This was the worst closing point decline on record, according to CNN.
As a result, the industrial average fell below the 25,00 mark fir the first time since January 4th.
Dow was at 800 points by 3 p.m., steadily dropping too 1,500 points before buyers limited its' decline. In addition, Nasdaq fell to %4, and Standard & Poor fell to 7.8 percent over the past few trading days. The New York Times noted, though, that the S&P drop over the last six trading days is similar in scale and speed to drops in January 2016 and August 2015.
The United States drop in stock was felt around the globe, as Japan's Nikkei index plunged 4% in Tuesday morning trading while the S&P/ASX 200 in Australia dropped 3%.
"The most important numbers to focus on are the fundamentals," Vice President Mike Pence said this morning. "And the fundamentals of this economy continue to be very strong."
CNN reports that investors main concern in this is the sell-off in the bond market, as the 10-year Treasury yield piked to a four-year high of 2.85% last week.
“The president’s focus is on our long-term economic fundamentals, which remain exceptionally strong, with strengthening U.S. economic growth, historically low unemployment and increasing wages for American workers,” said press secretary Sarah Huckabee Sanders in a statement issued by the White house. "The president’s tax cuts and regulatory reforms will further enhance the U.S. economy and continue to increase prosperity for the American people.”
According to Business Insider, there is potential for inflation to return causing a longer-term fear of Federal Reserve interest-rate hikes and possible a slowdown in economic growth. The cause, after all, for such a steep downfall in Dow stocks can be attributed to rising Federal interest rates, coupled with the fact that stocks have been growing too far, and too fast since November of 2016.
"Valuations got stretched and that led to a cascading effect today," said Sam Stovall, chief investment strategist at CFRA Research. "The market has to correct itself -- a resetting of the dials -- before this bull market can continue."
CNN states that though the market started off with a bang at the start of 2018, last week went on record as the worst in Wall Street's history. Nearly $1 trillion of market value was erased from the S&P 500 last week.
"Take a deep breath," wrote Analysts at Bespoke Investment Group. "For those investors that may have forgotten, this is what a market decline feels like."