LELAND, NC (WWAY) — The stock market took a hit on Monday, with some experts blaming a recent increase in COVID-19 cases.
The Dow Jones saw it’s biggest dip since October 2020, dropping 726 points or 2.1%. The Nasdaq dropped 1.1%, and the S&P 500 dropped 1.6%.
Jon Tait is senior wealth advisor at Signature Wealth Strategies in Leland. He says this comes after a year of positive returns.
“If you’re counting month-by-month closes, we’ve had 12 straight months of positive returns for the S&P 500,” Tait said. “The longest record of that goes back to the 1980s when we had 18 months of positive returns in a row.”
Tait says with such a long positive streak, a downturn could be coming.
“If a pullback were to happen in the market it wouldn’t surprise me because of how strong the market has been,” he said.
So what is contributing to the drop? Tait says one likely source is an increase in COVID-19 cases and the delta variant.
“If you’re worrying about a resurgence of COVID or lockdown measures being put into place, if that changes, that would potentially be detrimental to the economy so that’s certainly something to worry about,” he said.
In addition to the virus, Tait says another likely factor is inflation.
“The past couple inflation measures that we’ve gotten has shown inflation running at a higher than normal pace.”
Tait says while a one day drop like this can be concerning, he is advising his clients not to panic.
“If you’re worried about it again, it’s something to certainly talk about and have those conversations with your advisor and we have, but it may not necessarily mean that you need to do anything, sometimes it’s better just to do nothing.”