Dow Jones Tumbles Nearly 1,200 Points — Largest Point Drop Ever

NEW YORK, NY — The Dow Jones industrial average plummeted nearly 1,200 points on Monday, finishing at 24,345 points — down about 4.6 percent — and erasing gains for the year. At one point, the Dow plunged nearly 1,600 points, though it recouped about half those losses within minutes.

The massive fall was the Dow's largest in terms of points, though it had a steeper percentage drop as recently as 2011.

The Standard & Poor's 500, the benchmark for many index funds, fell 113 points, or 4.1 percent, to 2,648. The Nasdaq fell 273, or 3.8 percent, to 6,967.

Bond prices rose. The yield on the 10-year Treasury fell to 2.73 percent.

This was the second straight day U.S. stocks have been on a wild rollercoaster ride. The slump began on Friday when the Dow tumbled by more than 650 points, handing the market its worst week in two years. Investors fear signs of higher inflation and interest rates could derail the U.S. economy. Energy companies, banks, and industrial firms saw some of the steepest losses.

The fall comes after Janet Yellen left her post as head of the Federal Reserve on Friday. Jerome Powell was sworn in as chairman on Monday.

The Dow's largest point loss was a 777-point drop in September 2008 as the global economic crisis unfolded.

The stock market had been unusually calm for more than a year. The combination of economic growth in the U.S. and other major economies, low interest rates, and support from central banks meant stocks could keep rising steadily without a lot of bumps along the way. Experts have been warning that that wouldn't last forever.

David Kelly, the chief global strategist for JPMorgan Asset Management, said the signs of inflation and rising rates are not as bad as they looked, but after the market's big gains in 2017 and early 2018, stocks were overdue for a drop.

"It's like a kid at a child's party who, after an afternoon of cake and ice cream, eats one more cookie and that puts them over the edge," he said.

Photo credit: Richard Drew/Associated Press