The Dow Jones industrial average fell more than 1,500 points at one point on Monday, the worst intraday fall in market history. It was bad throughout most of the trading day, but the dive that happened around 2:40 p.m. closely resembled the 2010 flash crash. CNBC‘s Jeff Cox writes that it was not caused by anything fundamental. Instead, the market took a mind of its own, and sentiment and probably some computer-programmed trading sent Wall Street into a “bizarre tizzy.” There was fear brewing over multiple issues, and one of the biggest is concerns about rising interest rates even though government bond yields were actually lower on the day. Others blame the Fed for the market breakdown or at least the mentality that led to the particular selling climate.
“Panic is already starting to set in, which is kind of incredible when you actually think about it,” said Michael Yoshikami, CEO at Destination Wealth Management. “The S&P is trading where it was in sometime in December. So it’s not like we’re retracing an entire 12 months of returns here. I think investors are just understandably nervous. It probably is programmed trading kicking in at this point.”
The Dow had soared more than 40 percent since President Trump’s election, and that period included an impressive 20 percent rise in the S&P 500 for 2017 and the fastest start ever to a year in 2018.
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