Wall Street just suffered the worst day of the Trump presidency.
The Dow closed down 666 points, or 2.5%, its biggest percentage decline since the Brexit turmoil in June 2016 and steepest point decline since the 2008 financial crisis.
A strong jobs report showed wage growth is finally starting to pick up. That’s great news for workers, but it reinforced investors’ concern about inflation and the bond market.
“It’s all about rates. Asset prices and the economy have become addicted to low rates,” said Peter Boockvar, chief investment officer at the Bleakley Financial Group. “Sentiment got euphoric. There is more froth that needs to be taken off.”
The sell-off knocked the Dow well below 26,000. Both the Dow and S&P 500 suffered their biggest weekly drops since early 2016 — roughly 4% each.
Political turmoil is adding to the uncertainty. Market analysts pointed to the clash between the Trump administration and the FBI as another concern.
“There looks like a breakdown of the institutions in our country,” said Ian Winer, head of equities at Wedbush Securities. “No matter what side you’re on, that’s not good.”
While the point decline on the Dow was large, it paled in comparison with the scary days of the financial crisis. Friday’s decline was 2.5%. The Dow plummeted nearly 8% on a single day in October 2008.
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The Dow closed down 666 points, or 2.5%, its biggest percentage decline since the Brexit turmoil in June 2016 and steepest point decline since the 2008 financial crisis https://t.co/uJocG17vcY pic.twitter.com/8Qd6o3jMAx
— CNN (@CNN) February 2, 2018
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