Since President Donald Trump’s election in 2016, the stock market has been on the rise. In January, the DOW Jones even reached its all-time high of 26,000 points. The president has taken credit for this meteoric climb, but are we on the verge of a collapse like 2008?
It is not clear how much of the success of the stock market is owed to Trump. At least part of the rise occurred under the Obama Administration. That being said, most of the gains have occurred under Trump’s presidency. This could partly be attributed to his agenda of deregulation. This has led some experts to question whether or not we are about to see a market crash.
February 5, the DOW Jones dropped 1175 points, making it the worst ever point loss in a single day in history. The next day it rose back up 568 points, but was still well below the 26,000 points high. The day after this gain, we saw another 1000-point drop making it the second worst drop in history. This volatility has stoked fears of a financial collapse. Others are saying that this extreme volatility may be the new normal and that we should expect big single day losses and gains.
The stock market affects all of us, not just traders on Wall Street. Almost everything we use or buy is affected by how well the market performs. Given that it is so hard to predict just how well any market will perform, no one is quite sure what to expect. We should all hope that these sharp drops are just temporary and that we can avoid a crash.