On the exact day of the eleventh anniversary of the U.S. stock market's longest-ever bull run, Wall Street has suffered it's one biggest loss since the 2008 big crisis on Monday. Ongoing virus fears prompted investor panic and recession worries loomed large as tumbling oil prices. Some are considering to buy palantir shares.
Prices started plunging from bank stocks to oil futures to US Treasury when the heavy selling started in late Sunday among the Asian markets then later on it spread throughout Europe on Monday. The stock market went down to 20% or almost bear territory-the general decline in the stock market over a period of time, from its high in mid-February.
The Dow Jones Industrial Average plummeted a record of 2,013.76 points or 7.8% on Monday- on the very day that marked the 11-year anniversary of the longest bull run on record. The Standard & Poor's 500 fell 225.81 points or 7.6% and Nasdaq composite by 624.94 points or 7.3% for one of the worst days since the financial crisis.
Crude oil prices cratered by 25% after a weekend rift between the major oil producers Russia and Saudi Arabia. Investors who were already worried that the spreading coronavirus could grind the global economy to a halt were rattled. The two countries were reportedly planning to ramp up production on their own terms after the current deal expires at the end of the month and the stalemate continues.
The Wall Street executives are scheduled to meet with President Donald Trump on Wednesday to discuss the response to the outbreak after the continued sell-off prompted action from the White House.
"Uncertainty is what's causing all of this. We know there's going to be an economic impact, but we just don't know how big. Until we get clarity, people aren't going to come back into the stock market, that's for sure," says R.J. Grant, the director of equity trading at investment bank KBW.
The sharp drop on Monday almost ended the eleven-year bull market-in which prices are expected to rise or are rising, on the very day of its anniversary. It started on March 9, 2009, when stocks bottomed during the global financial crisis. At the time, the S&P 500 increased to more than 300% since then.
Investors are now looking ahead to the Federal Reserve meeting on March 17-18 in Washington for further clarity on the outlook of the economy. Due to the economic fallout from the virus, Fed officials surprised the markets last week when they implemented an emergency rate cut.
"The Fed cutting rates more will help the economy in some ways, but it still won't be the only remedy to thwart people's fears," says John Spensieri, head of U.S. equities trading at Stifel.
Crude oil prices also dropped by 24%, their worst since the Gulf War in 1991. Although this could mean cheaper gasoline, they could wreak havoc to those already struggling energy companies and countries that depend on oil, including the United States.
