Biggest stock market crashes in history
After weeks of close calls , the Dow made history on Wednesday by blowing past that key level for the first time ever. The historic milestone leaves the Dow up more than 1, points since President Donald Trump's victory in November.
The achievement is evidence of how optimistic investors have become about the prospects for the U.
Happy days are here again," said Ed Yardeni, president of Yardeni Research. Wall Street is clearly betting that Trump's plans to slash taxes , ramp up infrastructure spending and cut regulation will make the American economy grow faster.
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If that happens, without any disruptions to global trade , it could propel corporate profits, the lifeblood of stock prices. The Dow's long road to 20, But the jump in stocks is also a reflection of the solid economy Trump inherited from former President Obama. The Dow 20, milestone also shows how much has changed in the U. The index crashed to a low of 6, in March as Wall Street feared a complete collapse of the American financial system. The astounding 13,point rise since then has been fueled by a consistent, albeit imperfect, economic recovery combined with the U.
While the economic rebound from the Great Recession has been slower than many hoped, the unemployment rate is now at the lowest level since and corporate profits have climbed to record highs. Overall, it's a healthier economy and does justify a much higher stock market than eight years ago," said David Kelly, chief global strategist at JPMorgan Funds.
Biggest threats to the Trump market rally. Few expected the Dow to rise so much, especially after a Trump victory. In fact, many feared a market crash if Trump upset Hillary Clinton. Instead, Wall Street embarked on a very impressive post-election rally that carried the Dow above both the 19, and 20, levels. The VIX VIX , a gauge of volatility in the markets, has dropped to the lowest level since July But the Trump rally cooled off in recent months and Wall Street hit a bit of a psychological roadblock leading up to the 20, level.
On January 6, the Dow got incredibly close, rising to 19, Traders on Wall Street had fun with it, with some creating hats that said: One reason for the pause: We're going to enjoy this view for a while and hit the pause button," said Joe Quinlan, chief market strategist at U.
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Today's Dow is a lot different from just 20 year ago. Bank stocks have been among the biggest winners during the post-election party on Wall Street.
But JPMorgan's Kelly worries that "markets seem to be pricing in the positives, and not worrying too much about the negatives" such as a potential trade war or fiscal stimulus that overheats the economy.
Quinlan agrees that trade remains a serious risk given Trump's anti-trade rhetoric during the campaign. Already, Trump has scrapped the TPP trade deal and plans to swiftly start renegotiating NAFTA. If we start going down this deglobalization road, this market is going to lose its euphoric underpins pretty quickly," Quinlan said.
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