The Dow Jones Industrial Average dropped over 700 points in futures trading as the US presidential election results rolled in on the evening of Nov. 8 and it became clear that Republican candidate Donald Trump had a clear path to victory.
The Dow, a 30-company composite which serves as a proxy for the outlook for US corporations, had fallen more than 3.5% by 10pm EST, then recovered slightly.
Trump has campaigned on an anti-globalization platform, promising to put heavy tariffs on Chinese imports to the US, renegotiate long-standing trade deals to be more favorable to the US, and bring back manufacturing jobs that have been gone for decades. The policies are widely criticized by economists from all parts of the US political spectrum as “magical thinking” that is dangerous to American prosperity. In recent days, markets have priced in a Trump defeat, so the drop is especially steep.
As an economic slowdown and heavy debt hung over China, and Brexit and slow growth threaten the EU markets, US stocks and other assets have been a safe haven of sorts for global investors.
The Dow futures indicate that trend could be reversing.