The loud crash investors heard Friday was the door slamming shut on the 2019 stock market surge.
The month-long retreat from one of the stock market’s best starts in years culminated with President Donald Trump threatening to slap a 5 per cent tariff on Mexico and open another front in his trade war.
The Dow Jones industrial average skidded 354 points, or 1.41 per cent, to close at 24,815. All three US indexes closed out their first negative month in 2019. Friday finished the sixth consecutive week of losses for the Dow blue chips, erasing more than 6 per cent during that time. The last time the Dow fell six consecutive weeks was May 2011.
The Standard & Poor’s 500 index followed suit, sinking 36 points, or 1.32 per cent, to finish at 2,752. The technology-laden Nasdaq Composite closed at 7,453, a 114-points plunged that erased 1.38 per cent of its value.
US markets remain significantly ahead for 2019, but they are well off their highs. The Dow and S&P 500 each shed more than 6 per cent in May, and the Nasdaq is off nearly 8 per cent. A month ago, the S&P 500 was .007 per cent from an all-time high. The S&P has now fallen four straight weeks, losing 6.55 per cent. That is more than halfway toward a correction, which is a 10 per cent decline from the high. The broad market had not dropped four weeks in a row since 2014.
Numerous sectors, from oil to automobiles to banks and railroads, were reeling from Trump’s threat to impose a 5 per cent tariff starting June 10 on the US$348 billion ($532.5b) in goods that the US imports from Mexico. Trump’s threat follows his frustration over Mexico’s apparent inability to slow