The Dow Jones Industrial Average fell precipitously Monday afternoon, continuing a market correction that began Friday and interrupting consecutive months of uninterrupted growth.
The Dow began to crater Monday afternoon, falling more than 1,000 points during afternoon trading after initially rebounding from a smaller morning session drop. The decrease came after a dramatic 666 point drop Friday, prompted by an aggressive bond sell off. The dramatic correction amounts to the worst weekly stock market performance in two years.
Widespread speculation that the Federal Reserve will soon raise interest rates, combined with looming fears of imminent inflation, likely sparked the selloff. The aggressive drop was received on Wall Street as a natural correction to the 1,900 point rise that occurred over the first 18 days of 2018 and the longer 8,300 point increase since President Donald Trump took office.
Trump has aggressively branded his presidency as responsible for the booming market, placing his administration in a difficult political position if the correction turns into something more pervasive and long term.
The Fed has signaled it will take relatively dramatic action this year to slow growth, perhaps raising rates as many as four times, totaling a full percentage point increase over 2018. The resulting market contraction has erased all gains made in the first month of 2018.
Monday’s dreary stock market showing bled into international markets as Japan’s Nikkei 225 dropped by 2.6 percent and bellwether equity indexes in France, Italy and Spain slid by more than 1 percent.
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