- The stock market has had a wild few days.
- Despite that, the rally in equities since the 2016 presidential election was far bigger, and stocks would have to fall a lot more to wipe out their gains.
Stocks have had a wild few days, but they would have to drop a lot further to wipe out the post-election rally.
After President Donald Trump’s surprising victory in the 2016 presidential election, stocks went on a tear as investors began to anticipate a more business-friendly regulatory and tax environment. The S&P 500 rose 34% from its closing level of 2,139.56 on Election Day – November 8, 2016 – to a high of 2,872.87 on January 26, 2018.
The last several days of trading, however, have seen a steep decline from that high, with the S&P 500 dropping nearly 8% to a closing level of 2,648.94 on Monday. That means the index would have to fall another 509 points, or 19% from its current level, to give up the rest of the post-election gains.
The Dow Jones industrial average, despite coming off of the single-largest one-day point drop in the index’s history, tells a similar story. The Dow closed at 18,332.74 on November 8, 2016, and was at 24,345.75 after Monday’s bloodbath. The Dow would need to fall 6,013 points, or about 25%, from Monday close to return to pre-election levels.