On Monday, the Dow fell almost 1600 points during the day and closed 1175 points down from where it started — that’s the largest daily point loss on record.
However, the actual percent change for the Dow index Monday night was – 4.6 percent.
That’s nothing compared to when the Dow fell almost 13 percent on October 28, 1929 during the Wall Street Crash at the brink of the Great Depression, or when it fell over 1,700 points for a 22 percent change in 1987. At that time stock markets around the world crashed. You may know it as “Black Monday” or “Black Tuesday”.
So why does it seem like everyone is panicking over this? Well, analysts don’t really know why the Dow took such a big dip this time.
Take August 8, 2011 for example. The Dow fell 634 points — or 5.5 percent. That was due to the European debt crisis. Countries were bailing out and the European Central Bank announced a plan to purchase government bonds to keep countries from spiraling.
Some writers and analysts on the Internet think investors fear that stronger economic growth in the U.S. could cause rising interest rates and inflation. This means investors may want to invest more in safe assets and less in risky assets like company shares.