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The real reason why the stock market is down

Why are stocks falling again? President Donald Trump says it's because Democrats are gearing up to use their...

Posted: Nov 12, 2018 8:57 PM
Updated: Nov 12, 2018 8:57 PM

Why are stocks falling again? President Donald Trump says it's because Democrats are gearing up to use their impending control of the House of Representatives to investigate him. As always, when it comes to the markets, the real answer is complicated.

The Dow fell more than 600 points, or 2.3%, on Monday, dragged down by investors' concerns about the tech sector and the rising dollar. The Nasdaq fell 2.8% and the broader S&P 500 fell 2%.

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Apple (AAPL) fell 5% after supplier Lumentum cut its earnings and sales forecast because of weak demand, and JPMorgan cut its target price on Apple's stock.

That weighed on other technology stocks, including Amazon (AMZN) -— down nearly 4.5% — and Tesla (TSLA), which fell more than 5%. Facebook (FB), Google (GOOGL), Netflix (NFLX) and Microsoft (MSFT) were all down more than 2%.

The strong dollar also weighed on stocks. The US currency surged to a 16-month high because investors fear the European economy could stall if no Brexit deal is reached this week. Prospects of another rate hike from the Fed next month have also helped lift the dollar. The rising dollar is a signal of a strong economy, but it hurts sales and profits for American companies that do business overseas.

Though Trump blamed Democrats for the drop, the Dow had actually bounced back since the midterms, rising last week in its best showing since March. Wall Street tends to like stagnation in Washington, so investors are actually just fine with Democrats taking the House.

As for what Trump termed the "prospect of presidential harassment," there is not much evidence the stock market will bat an eye if Democratic leaders in the House begin investigations into the Trump administration. Stocks rose before, during and after President Bill Clinton's impeachment.

Stocks fell in the run-up to President Richard Nixon's impeachment proceedings and for a few months after he resigned. But the economy was in recession at the time.

The stock market had risen steadily after Trump's election through 2017. But it hiccuped in January 2018 after Trump introduced the first of many tariffs aimed at growing the US steel industry and reducing America's purchases of foreign-made products.

Stocks rebounded in the middle of the year but have swooned again because investors are worried about rising rates -— and a mountain of debt caused by the tax cut bill that higher rates will make more expensive to pay off.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 947918

Reported Deaths: 15377
CountyCasesDeaths
Marion1291181990
Lake635721103
Allen53899761
Hamilton44082449
St. Joseph42122590
Elkhart33803491
Vanderburgh30574449
Tippecanoe26915251
Johnson23727418
Hendricks22410342
Porter21832347
Clark17562231
Madison17492385
Vigo16302285
Monroe14545191
LaPorte14389239
Delaware14183222
Howard13971273
Kosciusko11498135
Hancock10935166
Warrick10737178
Bartholomew10635170
Floyd10514208
Wayne10077226
Grant9213204
Morgan8928160
Boone8463111
Dubois7791123
Dearborn769490
Henry7691133
Noble7466101
Marshall7409128
Cass7219118
Lawrence7026153
Shelby6647111
Jackson661386
Gibson6190107
Harrison609386
Huntington604495
Montgomery5853105
DeKalb581091
Knox5535104
Miami548888
Putnam543268
Clinton537465
Whitley529354
Steuben501768
Wabash488692
Jasper483861
Jefferson474492
Ripley457777
Adams446068
Daviess4231108
Scott409165
Clay394957
White393858
Greene393392
Wells389884
Decatur388797
Fayette378578
Posey362341
Jennings356056
Washington334747
LaGrange325175
Spencer321136
Fountain318455
Randolph317190
Sullivan309449
Owen287064
Starke282864
Fulton280454
Orange277859
Jay257038
Perry254152
Carroll245229
Franklin242838
Rush237030
Vermillion235050
Parke221420
Tipton212055
Pike211740
Blackford170534
Pulaski168551
Crawford147318
Newton145845
Benton143916
Brown135846
Martin130217
Switzerland126910
Warren115616
Union98511
Ohio80511
Unassigned0482

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1385749

Reported Deaths: 21820
CountyCasesDeaths
Franklin1538881574
Cuyahoga1358332341
Hamilton987081326
Montgomery679671161
Summit568451051
Lucas51531869
Butler48000663
Stark42232983
Lorain32046539
Warren30404338
Mahoning27463643
Clermont25990297
Lake24809422
Delaware22566147
Licking20767246
Fairfield20730223
Greene20611275
Trumbull20257516
Medina20074290
Clark18170332
Richland16680236
Portage16389231
Wood15926209
Allen14333261
Miami14018261
Muskingum12927155
Wayne12185244
Columbiana11980242
Tuscarawas11204271
Marion10908150
Pickaway10606129
Scioto10531127
Erie9864171
Ross9612177
Lawrence8934125
Hancock8603143
Ashtabula8474187
Geauga8251156
Belmont8236188
Jefferson7691175
Huron7537131
Union742651
Washington7380126
Athens709365
Sandusky6963135
Darke6875137
Knox6812122
Seneca6519137
Ashland6051115
Auglaize595388
Shelby5820104
Brown575372
Mercer565190
Defiance5564101
Crawford5563117
Madison551071
Highland549282
Fulton542583
Clinton533781
Logan518687
Preble5102111
Putnam4900107
Guernsey484364
Williams468982
Perry462254
Champaign454264
Ottawa442484
Jackson434563
Pike398345
Morrow396451
Coshocton391969
Fayette383753
Adams369275
Hardin366170
Gallia355458
Holmes3321111
Henry329869
Van Wert320771
Hocking310770
Wyandot285458
Carroll266352
Paulding246443
Meigs221742
Monroe192749
Noble174142
Morgan170029
Harrison160741
Vinton141319
Unassigned05
Fort Wayne
Partly Cloudy
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Hi: 83° Lo: 49°
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Angola
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Huntington
Partly Cloudy
62° wxIcon
Hi: 83° Lo: 47°
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Decatur
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62° wxIcon
Hi: 83° Lo: 48°
Feels Like: 62°
Van Wert
Partly Cloudy
61° wxIcon
Hi: 82° Lo: 47°
Feels Like: 61°
Monday is another nice and breezy day with warmer temperatures.
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