5 Reasons Why the Dow Suffered a 200-Point Nosedive Today

  • The Dow opened to modest gains before suffering a near-sudden downturn.
  • The sell-off gathered steam, and by mid-day, the DJIA had lost more than 200 points.
  • Here are five reasons why the stock market soured so quickly.

Monday looked to bring a slight recovery to the Dow Jones Industrial Average, which opened to modest gains that carried the index back toward all-time highs.

But the rally didn’t hold, and by early afternoon, the Dow had careened toward its second straight triple-digit loss.

Dow Lurches Toward 2nd Straight Big Loss

dow jones industrial average chart
The Dow suffered a stark reversal shortly after the markets opened. | Source: Yahoo Finance

Shortly before 1 pm ET, the Dow had lost 230.71 points or 0.82%. The index currently sits at 27,820.7 – nearly 300 points below its session high.

The Nasdaq and S&P 500 also incurred losses, sliding 0.79% and 1.2%, respectively.

5 Catalysts for Today’s Stock Market Sell-Off

Here are five primary catalysts that may have contributed to the stock market’s sell-off today.

1. A vital US economic indicator plunged worse than expected.

Dismal economic data served as the immediate catalyst for the stock market’s steep plunge.

ISM Manufacturing PMI
The US manufacturing sector continues to struggle, putting pressure on the Dow. | Source: Trading Economics

The US manufacturing sector has struggled to mitigate the damage from the US-China trade war.

Economists expected today’s ISM Manufacturing PMI reading to come in below 50 – indicating another contraction – but the scale of that decline far outstripped analyst fears.

Manufacturing PMI printed a 48.1, missing the forecast of 49.2 by a considerable margin.

2. That might mean a recession is coming

While a Manufacturing PMI contraction was expected, it incited renewed recession warnings. This index has now contracted for four straight months.

In the past, this has been a reliable – though by no means ironclad – leading indicator of an economic downturn.

Dow Jones, manufacturing recession
Source: Twitter

This indicator has produced a number of false positives, but…

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