The Dow Jones Industrial Average fell by more than 1,000 points Monday, the biggest daily loss in its history, plunging below the 25,000 threshold it surpassed in January.
The Dow was down 1,029 points by 3:07 p.m. Monday, surpassing the 777-point loss triggered by the House’s rejection of a bank bailout plan in October 2008.
U.S. stock markets opened trading Monday with heavy losses as investors braced for a series of expected Federal Reserve rate hikes.
The Dow opened 183 points lower than its Friday close of 25,520, starting the week at 25,337. The Nasdaq and S&P 500 also opened with losses, down 0.8 percent and 0.7 percent, respectively
Monday’s losses come after the worst week for U.S stocks in two years. The Dow dropped 665 points Friday and closed more than 1,000 points lower than the previous week’s record high close at 26,616. It was the biggest single drop in a day for the Dow since June 2016.
Breaking from prior administrations, President Trump and his top economic officials have tied themselves closely to the performance of the stock market.
As the Dow added 8,000 points over his first year, Trump routinely took credit for the booming market and improving economy.
“The stock market has smashed one record after another, gaining $8 trillion in value,” Trump said during the State of the Union last week.
The White House told CNBC on Monday, “We’re always concerned when the market loses any value, but we’re also confident in the economy’s fundamentals.”
Investors are selling stocks in part because of signs of a strengthening economy, which many think will lead the Federal Reserve to raise interest rates.
The Fed raised rates three times last year and is expected to raise rates at least three times in 2018. The Fed has seen inflation lag below a 2 percent target, but the growing economy has many convinced that inflation may gather steam. Interest rate hikes would be designed to keep inflation around 2 percent.
John Williams, president of the San Francisco Federal Reserve Bank, said Friday that three or four hikes in 2018 were possible, but downplayed more aggressive rate hikes, according to Reuters.
“The expansion is proceeding at a good pace, unemployment is low, and inflation is finally headed in the right direction again,” he said after a speech in San Francisco.
Treasury bond yields have increased as the sell-off continues, reflecting investors’ concerns about the depth of a stock market correction.
Dow futures sunk 190 points in overnight trading, while S&P and Nasdaq futures dropped 14.5 points and 34.5 points, respectively.
Analysts are also concerned that falling energy and commodities prices reflect a global lag in demand, which could stunt several years of global economic growth.
Updated at 3:40 p.m.