I am looking at the stock market, and there's a clear point where things started declining and then stagnating.

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What was the cause for this point? Was it political? I don't remember hearing about any unexpected stock market crash, so I am guessing some political event occurred? I can't quite decipher the exact date, but .... my guess would be it's due to North Korea nuclear threat?

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    A stock market crash can have many reasons, and not all are political. So I am not sure that this is really a question about politics. It would be a good question for the currently proposed stock market stack exchange site. But considering that this site does not exist yet we should keep it here for now. – Philipp Jun 6 '18 at 12:13
  • it would really be instructive to look at the moving average (say over a twenty day or better period). Immediate reactions (for example the tax bill passage on Dec 20 that created a temporary, atypical, rate rise) are smoothed out allowing a better identification of trends. I'm not in complete agreement with the "stagnating" assertion, but would agree that the market is not "booming" – BobE Jun 6 '18 at 15:11
  • @phillip, Politics and political actions certainly can play a major role in stock market movement, witness the reaction of the 2017 tax bill and the subsequent reaction to increased tariff announcement. HST, yes, there are additional stimulus at play. – BobE Jun 6 '18 at 15:19
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    I answered this, but I do think you're misusing the word "stagnation". – Bobson Jun 6 '18 at 21:38
  • If you'd turned on the news on that day, you probably would have heard about the 362 point drop (I remember it). It was the top story (for a night). Sometimes drops like that happen for no reason at all, just selling, or feeling the price is too high. @Bobson 's answer below says it was tied to fears of an interest rate rise, but one day drops like that aren't that uncommon, especially after a period if rising and possible reasons vary. It doesn't have to be something big like North Korean threats. – userLTK Jun 7 '18 at 2:53

I googled "january 2018 selloff" and got these as the top hits:

Jan 30: Stocks drop the most since August, Dow loses 362 points

"We've had a unilateral move higher [in stocks] to start things off and people are realizing this is not sustainable," said Art Hogan, chief market strategist at B. Riley FBR. "You're also seeing some cracks in the global story with interest rates rising."

Feb 2: Dow Jones suffers worst fall in two years amid fears of interest rate rise

The latest sell-off comes amid stronger signals for the health of the global economy, which investors fear could fuel higher levels of inflation that would prompt central banks to raise interest rates. Investors said the drop could be a sign of the market returning to more typical periods of peaks and troughs after abnormally calm conditions last year

Feb 5: Why the stock market is selling off has the best overall analysis:

Wall Street was overdue for a reality check. The Dow Jones industrial average was up over 26 percent from January 2017 to January 2018. That's a massive jump in one year. Historically, the stock market has gained 8 percent, on average, in a year. We just experienced three times that amount. Investors were beginning to look around and question whether stocks really should be at such high levels.


The sell-off started because of the Friday jobs report. On Friday, the Labor Department put out its monthly report on how many jobs were created in January in the United States and how fast wages are growing. Overall, it looked like good news. The economy added 200,000 jobs, and wages grew by 2.9 percent, the most since 2009. But Wall Street looks at things differently than most people do. When companies pay workers more, it usually means lower profits for shareholders.


Wall Street is really worried about inflation. It's not just higher wages that scare investors. It's also the prospect of more inflation. ... But the wage data Friday spooked investors into thinking that inflation could rise quickly this year as the tax cuts take effect and more and more companies start raising pay and prices.

In short, Wall Street is freaking out about what could happen in 10 to 18 months, not right now.


There's a new leader at the Fed: Jerome H. Powell. Compounding all of these worries is there is a new leader at the Fed. Economist Janet L. Yellen's last day was Friday. The markets loved Yellen because she kept interest rates low and she was slow to raise them. But Powell, a lawyer, is untested. Most think he'll be similar to Yellen, but no one knows for sure. He just started in the top job.

Feb 12: Nasdaq CEO says 'human emotion' triggered the market sell-off — not machines

The frenzied market sell-off last week was driven by human emotion and not algorithm-based trading, according to the CEO of the Nasdaq.

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