Why Has the Dow Jones Plunged 500 Points in One Day?

Why Has the Dow Jones Plunged 500 Points in One Day?

Wells Fargo's Investment Institute expects the S&P 500 will finish the year in the 2,800-2,900 point range, about 300 points higher than where it was trading on Monday. The S&P 500 index and Nasdaq lost 2.2 and 2.7 percent each, falling into correction range, a 10-percent drop from their 52-week highs.

The Standard & Poor's 500 index skidded 71 points, or 2.7 percent, to 2,569 as of 1:36 p.m. The price of gold and of silver, both considered flights to safety, were up on Monday. Despite its recent losses, Amazon stock is still up about 18 percent in 2018.

Consumer discretionary (+0.8%) is the early sector leader, while technology (+0.6%) and financials (+0.6%) also outperform.

That tweet was enough to send Amazon shares down 7 percent, or $50 billion, in early morning trading last week.

China's imposition of tariffs on a US$3 billion list of USA goods including pork and apples was expected, but still helped send markets down in what has become a jittery environment over trade war fears, said Craig Fehr, a Canadian markets strategist at Edward Jones in St. Louis.

Investors were also rattled by China announcing Monday that it is raising import tariffs on US pork, apples and other products, a move that ratchets up trade-war talk between the world's two biggest economies.

The fears of an impending trade war have rocked markets since Trump announced 25 percent tariffs on steel and 10 percent on aluminum that the United States imports.

"We always recommend investors take a long-term view during wild rides like we're seeing today", said Mike Loewengart, vice president of investment strategy at E*Trade. -Chinese trade tensions and mounting public scrutiny of technology companies. So we can expect to see this trade war continue.

"The Trump administration's announcements on trade sanctions in total so far encompass a relatively small portion of overall US trade, " according to Pride's note.




COMMODITIES: Benchmark U.S. crude lost $1.71, or 2.7 percent, to $63.23 a barrel in NY.

Media conglomerate Viacom sank 4 percent following reports that sibling company CBS wanted to buy it for below its current market value.

Troubles for technology companies are a big factor driving stocks lower.

"The mood remains decidedly bearish, and there is certainly no shortage of reasons to be fearful", said Chris Beauchamp, chief market analyst at IG. Much of Trump's criticism has come after unfavorable reporting in The Washington Post, which is owned by Amazon founder Jeff Bezos but is a separate company from Amazon.

Intel (INTC) shares were slammed after Bloomberg News cited people familiar with the matter in saying Apple (AAPL) planned to use its own chips in Mac computers starting as early as 2020. And Tesla, the electric-car marker on the defensive following a deadly accident involving its autonomous driving system, was down more than 5%.

Musk didn't help matters by tweeting a series of April Fools' day jokes about Tesla going bankrupt. That is a surprising reversal for the technology industry, which had spearheaded much of the gains of the almost 10-year bull market.

Returning from the long Easter holiday weekend, Europe's stock markets tracked others lower, though the scale of the losses were diminished by expectations of a rebound on Wall Street later.

But following revelations that Facebook data wound up in the hands of a private company without the full knowledge of users, all the FAANGs are facing the threat of a regulatory backlash.

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