A Terrifying Week That Started with the 'Trump Slump' and Ended with the 'Trump Rally'

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The U.S. stock market, which started with a 'Black Monday' due to the aftermath of the novel coronavirus infection (COVID-19) and the oil price war, ended the week with a 'Trump Rally.' Despite the market being severely shaken, with a market capitalization of 5,000 trillion won evaporating in just one day and many evaluations saying that the 'Trump Slump' had finally arrived, on the 13th (local time), President Donald Trump introduced various economic stimulus measures to combat COVID-19, somewhat improving investor sentiment.

On the 9th, the day of Black Monday, the New York Stock Exchange saw more than 3,500 stocks hit their lowest prices of the year, the most since the 2008 financial crisis. On that day, the Dow Jones Industrial Average plunged 7.79% (2,013.76 points) to close at 23,851.02, the S&P 500 index fell 7.60% (225.81 points) to 2,746.56, and the Nasdaq index dropped 7.29% (624.94 points) to close at 7,950.68. The spread of COVID-19 fears combined with the negative impact of the oil price crash triggered a circuit breaker for the first time in 23 years since 1997 shortly after the market opened. A circuit breaker is a system that temporarily halts trading to stabilize the market when stock prices rise or fall sharply.

CNBC reported that the market capitalization lost on that day across the three major indices?Dow Jones, S&P 500, and Nasdaq?reached $5 trillion (approximately 5,986 trillion won).

The shock did not stop there. On the 12th, the New York Stock Exchange recorded the largest drop since the 'Black Monday' of 1987, when the market plunged 22% in a single day.

On that day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average plummeted 9.99% (2,352.60 points) to 21,200.62, the S&P 500 index fell 9.51% (260.74 points) to 2,480.64, and the Nasdaq dropped 9.43% (750.25 points) to close at 7,201.80.

The New York Stock Exchange saw the circuit breaker reactivated just three days after the last time, as the market plunged 7% immediately after opening.

President Trump's announcement of a travel ban from Europe caused aftershocks in the financial markets, leading local U.S. media to speculate whether a 'Trump Slump' had arrived. The 'Trump Slump' refers to a phenomenon where the U.S. market suffers a downturn due to President Trump's actions. This led to forecasts that a red light had been turned on for President Trump's path to re-election.

However, on the following day, the 13th, the New York Stock Exchange rebounded nearly 10% in a single day, ending with a 'Trump Rally.' In particular, the market's gains more than doubled late in the trading session after President Trump declared a 'national emergency' during a press conference.

On that day, the Dow Jones Industrial Average rose 1,985.00 points (9.36%) to close at 23,185.62, the S&P 500 index gained 230.38 points (9.29%) to finish at 2,711.02, and the Nasdaq index increased 673.07 points (9.35%) to close at 7,874.88.

CNBC evaluated that the gains expanded following President Trump's mention of expanding COVID-19 testing through the introduction of drive-through testing.

This content was produced with the assistance of AI translation services.