Stock market rallies after overnight crash during Trump election
As the presidential race was undecided well into last night, U.S. stock futures plummeted more than 800 points overnight. Analysts had feared a stock market crash after this election, particularly if Donald Trump was elected over Hillary Clinton. But once Clinton conceded, stocks started bouncing back. By the time the market closed today, the Dow had rallied, ending up nearly 257 points.
Throughout history, the market has had mixed reactions to the election of new presidents.
According to MarketWatch, the biggest stock market surge between election day and inauguration day was 13% when Herbert Hoover was elected in 1928. At the time, stocks were booming. Then the stock market crashed in October 1929, launching the Great Depression.
The biggest slump between the election and inauguration was 20% after Barack Obama was elected in 2008. That was during the financial crisis.
Whether the market will continue to climb or fall until Trump is inaugurated, financial analysts point out that market crashes or drops generally don't last long.
Said Craig Forbes of Alpha Omega Wealth Management, "Don't do a sudden reaction and get afraid and jump out at the wrong time when we think it's going to be short term anyway."
But there has been long term nervousness over the stock market, and downright fear of investing since the economic recession that started in 2008. Analysts say that has translated into into a retirement crisis for both Baby Boomers and Gen Xer's.
Alpha Omega Wealth Management in Henrico just grew and bought Diveley Lind, an investment firm in the Shenandoah Valley, as they're seeing more people seeking financial advice.
Said Forbes, "I think you've got college debt that's gone through the roof. I think you've got Baby Boomers that are aging and not able to get much help. They're all looking for help in how to get to retirement."
CNBC reports that now retiring Baby Boomers are far short on retirement savings. In a survey, only 60% of Boomers said they have any retirement savings, and only 27% felt they will have enough to retire.
Meanwhile for Gen Xers, the Fed reports the median amount in retirement accounts for people age 35 to 50 is only $59,000.
Analysts say the stock market rally today is due to investors' belief that the Trump administration will mean more infrastructure projects, more military spending, and lower drug prices.