Insights into recent stock market drop

Wall Street took a beating Monday with numbers plunging hundreds of points. Nearly everything on Wall Street tumbled as fear about a slowing U.S. economy worsened, resulting in another sell-off for financial markets around the world.

The S&P 500 sank 3% Monday for its worst day in nearly two years. The Dow Jones Industrial Average dropped more than 1,000 points, and the Nasdaq slid 3.4%. That followed a 12.4% plunge for Japan’s Nikkei 225, its worst since 1987.

To discuss the effects this will continue to have on our economy, we were joined by Jim Rounds, President and CEO of Rounds Consulting Group, Inc.

“…people are concerned about the Fed acting properly but it’s not as bad as I think it initially appeared. It’s playing out a little bit like we expected,” said Rounds. 

The number of jobs tends to fluctuate a little bit each month. On Monday, it varied more than they expected. 

“So my rule of thumb is if you’re at the tail end of an expansion, if you’re still generating about 200,000 jobs a month across the nation that’s still a solid number. If you fall below 100,000 you get into that territory where maybe there are some signs of a recession. We had 114,000 and we also had another prior month revised down to I think it was 108,000 so we’re hitting that territory…,” said Rounds. 

The tech stock market increased too much in only a short period of time. 

“Yes, but it’s really across the board even with all of the adjustments that happened just looking at the data right before the show, Dow is still up double digits. S&P now stacked over 15% compared to the prior year so I think this is more of a correction. I think it’s people taking some profit…,” said Rounds.