During 2017, the stock market in the United States saw one of the best years on record. Shortly after the election of Donald Trump, a variety of pro-American regulations were set forth that did great things for business. Throughout the year, continued regulation changes and an overall improvement in the economy sent stocks soaring. While this continued for the first month of 2018, February has gotten off to a terrible start.
During the week of February 5 through 9, the stock market had one of its worst days on record. Prior to the start of that week, there had never been a 1,000 point drop in the Down Jones Industrial Average. However, that week alone saw two days with a drop of that magnitude. The reason for the decline is still not completely clear. After receiving some less than ideal news when it came to jobs data and earnings results, the stock market started to drop. This triggered some panic selling and volatility hast peaked to its highest point in years.
After a devastating week on Wall Street and for investors across the world, it appears that the week of February 12 was off to a good start (https://www.cnbc.com/2018/02/12/us-stock-futures-dow-data-earnings-and-politics-on-the-agenda.html). While the major indices are still 5-10% off of their all-time highs reached just a few weeks ago, it appears that the big drops may be behind us. On Monday, February 12, the Dow Jones increased by more than 400 points.
While the increase in stock market value is a good thing for investors, and much better than another big decline, financial experts are concerned about another wild swing in stock values. Those that are close to the market and have seen a lot of different markets in the past believe that the stock values could continue to be volatile for the foreseeable future. This could include seeing a big drop again in the coming weeks before prices finally stabilize. However, people are not urged to exit the market entirely. Overall fundamentals in the market are still strong and a rebound is bound to be on the way.