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The S&P 500 lost more than $2 trillion in market capitalization within 15 minutes in reaction to Trump tariffs. (decrypt.co)

submitted 3 weeks ago by [email protected] to c/[email protected]

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[–] [email protected] 28 points 3 weeks ago (4 children)

As of 8:45 PM ET, Dow Jones futures were down 1.26%, S&P 500 futures fell 1.16%, and Nasdaq 100 futures declined 1.20%.

Stock market indices fluctuate regularly. If you multiply a small normal percentage change in a national index by the size of an entire national economy you'll get a big number like $2 trillion to make an alarming headline.

There's a saying in stocks, if you want to see the trend, zoom out. If you're trying to push a narrative, zoom in. There's a reason alarmist publications pick very small time intervals when discussing how markets are affected by government actions.

[–] [email protected] 7 points 3 weeks ago (1 children)

Anyone refering to market prices generating or erasing money, leave alone value, has serious misconceptions about the economy. Also we need to stop the worship of market capitalization. The market price only reflects the price of currently traded stock. Have someone announce they are going to buy up or dump 20% of any stock and see it flying or tanking.

[–] [email protected] 2 points 3 weeks ago (1 children)

I mean, yeah, it's totally imaginary value. But then again, so is all money... The current financial system is a nonsensical house of cards propped up mostly by how bad most everyone wants it to stay standing

[–] [email protected] 1 points 3 weeks ago

it’s totally imaginary value

That 'totally imaginary value' bought me a new car in January when I was Trump-proofing my life.

[–] [email protected] 6 points 3 weeks ago (1 children)

This was my first thought as well. $2T sounds life a lot but but I had no idea how much is actually in the market. Apparently $2T is nothing because even my index fund for the S&P 500 went up today.

[–] [email protected] 1 points 3 weeks ago* (last edited 3 weeks ago) (1 children)

Apparently $2T is nothing because even my index fund for the S&P 500 went up today.

That price yesterday was determined at market close 4pm EST and before the tariff announcement.

The $2 trillion loss was in futures trading after the market closed yesterday. It represents 4% of the total market cap of the S&P index. As of right now, the S&P is still down 4% for the day.

[–] [email protected] 1 points 3 weeks ago

Well, damn.

[–] [email protected] 3 points 3 weeks ago* (last edited 3 weeks ago) (1 children)

As of 8:45 PM ET, Dow Jones futures were down 1.26%

(A) That was a temporary partial recovery. (B) That was Dow Jones, not the S&P. Nobody cares about the Dow Jones. It's not a real stock index.

you’ll get a big number like $2 trillion to make an alarming headline.

The 2 trillion drop from the article represented about 4% of S&P Market Cap. And as of now the S&P is again down 4% percent today. A 4% drop is an alarming headline. And it is only the first day.

Edit:

You were given the earliest notification of the 4% market drop in the entire lemmy/reddit ecosystem right here on [email protected] and you wasted it by pretending it didn't happen.

Now the drop is up to 5% of S&P market cap and 6% of NASDAQ. Did you really think that Trump imposing even larger tariffs than the Smoot Harley tariffs that triggered the 12 year Great Depression wasn't going to affect the stock market?

[–] [email protected] 2 points 3 weeks ago (1 children)

I would have gotten much earlier notice if I cared about the markets, followed the news, and actively traded. Articles like this are unhelpful because they are written to be as alarmist as possible, and aimed at people who don't understand the markets.

People in the comments believe the alarmist headlines, when they are deliberately written to sound as bad as possible.

Its not reasonable to make conclusions off of 15m of data. Its manipulative to cite large numbers deliberately without context.

The fact that the trend happened to continue this time doesn't make anything I said untrue. The news has claimed markets have "plummeted" many times this year only to immediately recover. Articles like this aren't good predictions because they have been wrong every other time.

[–] [email protected] 1 points 3 weeks ago* (last edited 3 weeks ago) (1 children)

Articles like this are unhelpful because they are written to be as alarmist as possible, and aimed at people who don’t understand the markets.

It was aimed at people who do understand markets, and it actually understated the disaster, because it came out so early. We've already gone from the 4% market drop I reported to a 10% market drop in the S&P.

Its manipulative to cite large numbers deliberately without context.

It was 4% of the market. It was very large.

The news has claimed markets have “plummeted” many times this year only to immediately recover.

The S&P immediately went down another 5% today. So it is down 10% now. Half way to an official bear market. And it is going to go down again every single time we hear about another country retaliating against Trump's tariffs.

Articles like this aren’t good predictions because they have been wrong every other time...The fact that the trend happened to continue this time

(1) The 4% market drop in the initial 15 minutes was not a "prediction" at all. It was a factual reality.

(2) You were treating this as a 1 day event random market fluctuation. It happened because Trump's tariffs were even bigger than the Smoot Harley Tariffs that directly caused the Great Depression that lasted 12 years, not 1 day. The stock market was down 90% in 1933 from were it was in 1929.

It didn't "happen to continue". It wasn't random at all. It happened because of a specific thing Trump did that had a disasterous and very long lasting historical parallel.

[–] [email protected] 1 points 3 weeks ago (1 children)

The headline did not say 4% of the market. It said a large number without context.

Why are you responding with new information? My critique this whole time has been about this specific article, and the kind of reporting that leads to it.

I don't have any particular insight, nor have a been discussing the economy.

Obviously you should draw new conclusions when new data is available.

[–] [email protected] 1 points 3 weeks ago (1 children)

The headline did not say 4% of the market. It said a large number without context.

You could have checked the context of total S&P market cap before concluding that $2 trillion was an 'insignificant' number.

and the kind of reporting that leads to it.

CNBC is a highly reputable financial news source. It was wrong to be thinking and suggesting their reporting was bad.

Why are you responding with new information? My critique this whole time has been about this specific article

Okay. I guess my criticism is with the assumptions you made. When you said "the fact that the trend happened to continue this time..." it shows that you think of the stock market as a random casino divorced from real events. If you had known what the reason was for the huge drop on the first day and that it was tied to major past historical events, you would have also known that it was highly likely to continue on the next day.

In summary:

Your assumption that CNBC was a non reputable news source with some sort of agenda was wrong.

Your view of the stock market as a random casino and yesterday's huge drop as a random one-off event not likely to be repeated was wrong.

Your assumption that $2 trillion was an insignificant fraction of total market cap was wrong.

I'm just saying, maybe be a little more cautious next time about throwing your spin on things if it is not something you personally participate in.

[–] [email protected] 1 points 3 weeks ago* (last edited 3 weeks ago)

the article is from decrypt.co what are you on about?

Edit: Who are you quoting? I never said "insignificant" in this discussion.

Edit2: I think I'm arguing with an llm.

[–] [email protected] 1 points 3 weeks ago (1 children)

Yup. Dotcom and Housing crisis saw the entire market drop over 50% each in ~3 years until lowest point, but since the 90s, the market has only gone up overall… 3000%. This is a blip, enjoy the sale.

[–] [email protected] 6 points 3 weeks ago* (last edited 3 weeks ago)

The SP500 did not break the high of the Dotcom era for more than a decade. It did so briefly in 2007. And you know what happened next. It stayed below that high for another several years.

That's based on raw values. Adjusted for inflation I'm certain the Dotcom bust lasted until the mid-2010s. That's about when the tech industry really took off again too.

Also it's not up 3000% since the 90s. More like 800% give or take. The entirety of that being between the years 1990 to 2000 and 2015 to 2024. If one has only started paying attention to the markets the past several years would one be familiar with the paradigm of "enjoy the sale". The past decade has been the greatest bull market ever. Things had basically gone parabolic where gains were exponential and losses were only small and brief. It's no wonder people are spoilt.

Long term investors (read: the average person) must be willing to expect time frames on the order of a decade of stagnation. These periods can and do happen. Just because the past 10 years has been a fever dream doesn't mean we should forget lessons of the past 100 years.

[–] [email protected] 5 points 3 weeks ago (1 children)

markets reversed violently as Trump unveiled tariff rates nation by nation during his "Make America Wealthy Again" event.

AHEM

......HA!
LOL

Possibly even ROFLMFAO

[–] [email protected] 3 points 3 weeks ago (2 children)

but not quite 'LMAOROTFBTCSTCNDBFOOTWIFOAGWLLBGWTHROOTSAIAKBAYB'?

[–] [email protected] 1 points 3 weeks ago

If my brain was properly caffeinated, potentially. Currently don't have the energy to go beyond a ROFLMFAO

[–] [email protected] 0 points 3 weeks ago

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[–] [email protected] 2 points 3 weeks ago

Trump described the measures as “reciprocal tariffs,”

Is it really reciprocal, if the trade deficit stems from the problem that many US-made products are bad or useless in other countries?