The markets endured their worst day of trading of this young year as the Dow Jones Industrial Average dropped 2,000 points to close at 23,850.79 -- a 7.79% decline. The Nasdaq Composite Index fell 624.94, to close at 7,950.68, and losses to the S&P 500 triggered a temporary halt on trading in the early morning hours. The S&P itself closed down 225.81 at 2,746.56, a 7.6% loss on the day.
Stocks were set up for a fall on Monday as every major financial indicator turned south.
Oil was down over a scuttled OPEC deal which will now mean that Russia and Saudi Arabia will flood the global oil market with cheap crude. The price war pushed the price of crude down to roughly $30 per barrel.
Meanwhile, markets are still trying to absorb all of the latest news around the spread of COVID-19, the disease caused by severe acute respiratory syndrome coronavirus 2. The disease continues to spread in the U.S., with 607 total confirmed cases so far, according to data compiled by Johns Hopkins University. Schools are closing, businesses are encouraging their employees to work remotely if they can and nearly everyone is canceling non-essential business travel.
Hits to oil and gas companies and airplane manufacturers were always going to weigh heavily on the Dow. And now there's an open discussion in the halls of the U.S. government about the possibility for industry bailouts.
That kind of talk doesn't bode well for the overall health of the U.S. economy, nor do fears over large hits to the nation's services sector.
And the Federal Reserve has basically flipped all of the switches it possibly can to keep the U.S. economy humming, driving interest rates down to near zero in an effort to encourage investment in the stock market.
None of this seems to be helping, yet. And startups have as much to fear from a market contraction as the rest of the world. Less money flowing in financial markets reflects fewer dollars getting spent in the real world -- and more cautious decision-making around how to spend the money a company has.