U.S. stocks have worst Christmas Eve ever

San José, CA – On Monday, December 24, all three major stock market indices smashed the old records for declines on Christmas Eve. The Dow Jones Industrial Average (DJIA) fell more than 650 points or 2.9%, more than twice the 100 year record set back in 1918 when it fell 1.1%. The broader S&P 500 fell 2.7%, to close more than 19% from its record high, and less than 1% away from the 20% drop that would put it in bear market territory and ending an almost ten-year bull market in stocks.

While the main problem dragging down the stock market is a world-wide economic slowdown and a looming recession in 2019, the Trump administration managed to make things worse. Over the weekend, Trump’s Secretary of the Treasury Steve Mnuchin called the heads of the six biggest banks in the United States, and then issued a press release about them Sunday, December 23. While this was probably an attempt to show that the administration was engaged, even though Mnuchin was on vacation in Mexico, it ended up unsettling many investors. Then on Monday, Trump fired off another tweet criticizing Federal Reserve Chair Jerome Powell, reigniting fears that Trump would try to fire Powell. Right after Trump’s tweet an attempt to rally from an earlier 300-point loss faded and the Dow ending up dropping even more.