- The Dow Jones Index crashed 6.3% on Wednesday. Notably, futures point to weak opening today as well. US stock markets have broken their 11-year long bull market and are in the bear market territory now.
- On multiple occasions, President Trump has tweeted about US stock market returns and a booming economy. However, during trade on Wednesday, the Dow Jones Index fell below the price level when President Trump was inaugurated.
Dow Jones crash
The Dow Jones Index has fallen sharply over the last month. President Trump has tweeted about booming US stock markets and a strong US economy multiple times. He even advised buying stocks after the US stock markets crashed in the fourth quarter of 2018. Notably, US stocks jumped sharply after that. Last year, the Dow Jones Index had its best January in almost three decades. President Trump promptly tweeted about the milestone.
US stock markets and coronavirus
US stock markets soared last year. The Dow Jones Index (NYSEARCA:DIA) and the S&P 500 (NYSEARCA:SPY) recorded stellar returns even though recession pundits predicted a crash. However, US stock market valuations started to look frothy over the last few months. Warren Buffett has been sitting on a record amount of cash. High valuations leave little opportunities for a value investor.
President Trump after Dow Jones crash
Last week, in his address to the nation, President Trump emphasized that “this is not a financial crisis.” However, for all practical reasons, the economic impact of coronavirus is now way less severe than the health crisis. As cities across the globe shut down, several industries, especially airlines and tourism, have taken a big hit. Coronavirus has also impacted people who are daily wage earners and have little savings. Meanwhile, the Dow Jones crashed even though President Trump declared a national emergency last week. The Fed’s emergency rate cuts didn’t soothe nervous investors either.
Stock market crash, not much to tweet about
The stock market crash erased all of the Trump era returns in intraday trade on Wednesday. Futures point to a weak opening for Dow Jones today also. Over the last three years, booming stock markets gave President Trump a lot to tweet about. However, with the 1,000-point daily crash being the new reality, President Trump might not have much to tweet about regarding the stock markets. The crash in the Dow Jones could also impact President Trump’s 2020 reelection chances. Read Stock Market Crash Could Be Trump’s Worst Nightmare to learn more.