Four days ago, the Dow Jones Industrial Average dropped 2,353 — which was, at that point, the worst single-day point drop in history. That record did not last long.
On Monday, the Dow fell nearly 2,997.10 points, breaking the grim record the markets set just a few days earlier.
In fairness, a partial explanation for why these two massive drops occurred so close together is that the Dow’s overall price — it closed at 20,188.52 on Monday — is high by historical standards. But Monday’s nearly 3,000-point disaster for stocks still cost the Dow nearly 13 percent of its overall value.
That’s the worst trading day in percentage terms since the “Black Monday” crash of 1987, when the Dow got a 22 percent haircut.
Until recently, the markets appeared to be strong — the Dow flirted with the 30,000-point threshold as recently as late February. But fears of the coronavirus pandemic and its impact on the global economy have sparked panic both in US markets and abroad.
Nor is there any reason to suspect that things will get markedly better before they get worse, as the Trump administration’s response to the coronavirus pandemic has largely been incompetent.
The administration dismantled much of the federal government’s permanent infrastructure to deal with a global pandemic. And it’s rolled out testing for the disease more slowly than our peer nations. These failures are likely to exacerbate the economic effects of the virus.
Thus, while it should be noted that the markets are often a poor indicator of the nation’s overall economic health, there is good reason to expect that the United States — and the world as a whole — is entering a sharp economic downturn that will soon be felt far beyond the stock market.