Investors are looking to recover from a 1,000-point rout in the Dow Jones Industrial Average on Monday, with a bit of Twitter cheer leading from the President, but investors are pulling back for a second session.
The president said that world leaders are getting the coronavirus under control and the market reaction to the epidemic is overblown.
Despite his social media optimism, there could be even darker days ahead if things don’t go well for Donald Trump in November, the president told an audience in India on Tuesday.
Trump said that the U.S. stock market will crash if he loses next year, Reuters reported.
“If I don’t win you’re going to see a crash like you’ve never seen before,” Trump told business leaders during his trip to India.
To help goose the economy, Trump said that his administration planned to announce tax cuts for the middle class “in the not too distant future,” Reuters reported. The Trump tax cuts in 2017 are often credited with helping to propel the major stock market indexes to multiple record highs over the past three years.
The Dow suffered its worst loss in two years on Monday in what was only the third 1,000-point decline in its history. Markets were poised for a modest recovery on Tuesday.
The last five times the Dow fell more than 2% in 2019, the average gain in the next session was 1.4%. The advance in the next five days following a 2% drop was 2.9%, according to a Bloomberg analysis.
Most market-watchers placed the blame for Monday’s drop on the effects of the coronavirus as China struggles to get the epidemic under control and the infection spreads outside China.
The Dow was rising 50 points, or 0.18%, to 28,011 in early trading Tuesday.