If the S&P 500 closes out the year where it stands today — or drops even lower than the 1.5 percent it is currently down — it will mark the S&P’s worst annual performance since the crash of 2008, according to Yahoo Finance.
The stock market, of course, has been in a bull market since March of 2009, with only a few corrections along the way. We’re in a correction now, with stocks down about 10.2% from the high of Sept. 20. A correction is a drop of 10% or more, while a bear market is a 20% drop, or greater. The last bear market ended in 2009.
President Donald Trump has had some impact in on the stock markets, though not as much with his pro-business policies as his ongoing trade wars:
Trump supporters claim Trump policies—including sharp corporate tax cuts and deregulation—have stimulated the economy above Obama-era levels. But if so, the stock market’s performance in 2018 sure hasn’t reflected that. It’s even more odd that stocks have slipped in 2018 because corporate profits have soared on account of the tax cuts.
More important than arguing about presidents is figuring out what a wobbly stock market seems to be saying about the future. Investors are vacillating between pessimism and optimism right now, with this fall’s selloffs revealing worries about slowing economic growth and profits, and a damaging trade war with China. Yet job growth is still good and unemployment remains extremely low. Consumer spending is strong and many companies can’t find enough workers.
Trump is contributing to investor worries with his on-and-off trade disputes. When profits were soaring and GDP growth came in above 4% earlier this year, markets brushed off the trade wars. But with the growth and profit boom possibly in the past, markets are more vulnerable to tariffs and other protectionist measure that add to costs on consumers and businesses.