NEW YORK CITY (NBC News) — The Dow plunged more than 1,000 points just before the final bell clanged Thursday. It represented a full market correction, defined as a 10 percent drop from its 52-week high.
The S&P 500 also dropped 3.7 percent to a new low for the week.
After a record run-up, stock markets have been newly volatile following a stronger-than-expected January jobs report. Some investors saw the fastest rate of wage increases in recent times as a signal that the Fed might hike interest rates higher and sought to lock in gains, leading to the sell-off.
By closing at 23,860 points the Dow Jones Industrial Average has officially corrected. The index peaked at 26,616 points just two weeks ago.
And the ride isn’t over.
“With the market closing at the low end of the day’s range, expect more gyrations in the days and weeks to come,” Greg McBride, chief financial analyst for Bankrate.com, said in an email.
In the big picture, the dip isn’t unusual. What’s unusual is that there hasn’t been a correction in the stock market since 2016.
“When the market declines sharply, everyone naturally wonders ‘What’s wrong?’ Nothing is wrong economically,” said McBride. “The economy is doing better now than it has any time in the past decade. This is just some healthy, and overdue, volatility to wring out any excess.”