Stock Market Decline Continues as Election Hype Fades
The stock market is starting to stabilize after the election boom has ended, and we could see the decline slow down very soon.
The US stock market continued its downward progress on Friday as trading ended, with the Dow Jones losing 305 points and dropping 0.70%. Investors are worried about how far it will fall.
The Nasdaq Composite fell 2.24% on Friday as well, with the S&P 500 falling 1.32%. These drops follow several days of declining numbers, which spells disaster for the stock markets after they shot up remarkably high after the US election results.
Investors purchased assets after the election based on who they thought the economy would respond to the election results. There was also a massive influx of trading leading up to the election results and investors tried to predict the outcome.
Now that all of that election uncertainty has faded, the market is starting to stabilize. The wild ups and downs we have seen recently could be coming to an end. We will have to wait and see how the market loans out this week, although Monday’s trading is expected to show a future decline. The expectation is that the drop will not be as significant for the indices as it has been the last few days.
Market Factors to Watch
There are still plenty of results from the US election to watch, however. As President-elect Donald Trump appoints people to positions within his cabinet and in the government, their appointments will have an effect on the market. Many of these appointments will continue to be made as Trump prepares to be sworn in on January 20th.
On that date, we can expect the market to surge again, and we should see fluctuations with the various appointments being made. Little that outgoing president Joe Biden does ahead of his departure should affect the market. He is now what is known as a “lame duck” President, meaning that any bills he signs into law or any orders he makes could be quickly discarded once Trump is in office. Most exiting Presidents do not try to enact many laws and make many changes as they depart, but they will attempt to issue pardons as a gesture of doing some good before they leave.
The stock market decline should slow down as the week progresses, and we should see more stabilization that will likely not entirely remove all the gains made since the elections.
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