Today, the Dow Jones Industrial Average plummeted an alarming 800 points, which is 3.03% of its total value. This plunge more than eliminates the 400 points gained in yesterday’s session.

Every single stock in the Dow is down today, with companies only left hoping to finish the day less bruised than most of the field. Coca-Cola (KO) was the best performing stock, remaining virtually unmoved from its price at the open, dropping only -0.94%. Some other companies, such as Walmart (WMT) and Procter and Gamble (PG), held relatively stable but were still ended up with slightly deeper losses (-1.21% and -1.46%, respectively).

While there are some stocks that weathered this volatile day, the companies that were unable to stabilize, truly dragged down the market. Walgreens (WBA) and JP Morgan Chase (JPM) have contracted more than four percent today, while Dow Inc. (DOW,) took the cake with a negative shift of 5.91%.

S&P 500 also took a beating, shrinking by 2.93%. Over eight companies in the exchange were down more than 8%, while three companies were down more than 10%. The worst performer in the entire index was Macy’s Inc (M), which lost 13% of its value. Macy’s losses were prompted by earnings coming in far lower than projected. Today’s events have further frightened the company’s investors, the stock having collapsed over 60% in the past 52 weeks.

So what’s behind the market-wide losses? The three main American stock markets’ horrid performances were mainly due to investors being spooked over the idea of a potential recession sparked by a glaring pre-recession warning sign that manifested today.

That sign was the bond yield curve becoming inverted shortly after trading began, the ten-year yield falling below the two-year yield. For the past 50 years, every time the yield curve inverts in this way, a recession follows within two years.

The bond yield curve shows the interest or “yield” on U.S. bonds over time. The line represents the amount of interest on bonds that one would receive for holding the issue. Usually the predicted interest increases over time, creating a curve that rises. The two-year/ten-year comparison is a key measure for financiers; an inversion occurs when investors believe interest rates will decline in the near future due to a weaker economy and shrinking government revenues, as we saw in 2008. If the inverted yield curve signals what it has for five decades, a recession is coming soon.

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