Wall Street just had its worst trading day in years by some metrics, and the sell-off was broad and brutal. Today, Nicole explains how bad it really was, why this happened in the first place, what will happen next, and what you should do to protect your money. All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Open to the Public Investing, member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions, LLC (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative, involves a high degree of risk, and has the potential for loss of the entire amount of an investment. Cryptocurrency holdings are not protected by the FDIC or SIPC. Treasury accounts offering 6 months T-Bills are offered by Jiko Securities, Inc.,member FINRA & SIPC. Securities in your account are protected up to $500,000. For details: www.sipc.org. Banking services and the Bank Accounts are provided by Jiko Bank, a division of Mid- Central National Bank. For U.S. Investments in T-bills: Not FDIC Insured; No Bank Guarantee; May Lose Value. Treasuries risk disclosures, see https://jiko.io/docs/treasuries_risk_disclosure.pdf. See public.com/#disclosures-main.
Chapter 1: How can I avoid credit card debt?
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Go to Chime.com slash disclosures for details. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. Hey money rehabbers, I'm recording this late Monday night because holy mother of God, it has been a day in the markets and the news just keeps rolling in.
If you looked at your investment portfolio today, you probably wish you didn't. Wall Street just had its worst trading day in years by some metrics and the sell-off was broad and it was brutal. So today I really want to explain how bad it really was, why this happened in the first place, what will happen next and what you should do to protect your money.
So let's start with what we saw on Wall Street. As you know, there are three main indices that investors use to track the market. The Dow Jones Industrial Average or just the Dow, the S&P 500 and the Nasdaq Composite. Investors use the Dow and the S&P 500 to gauge how the market as a whole is doing. The Nasdaq can also give you a vibe check on the market, but it's more tech focused.
Today, none of these indices were happy. The Dow fell 890 points or over 2%. The S&P 500 dropped nearly 3% and briefly hit its lowest level since last September. The Nasdaq, which was hit the hardest, plummeted 4%, the worst single day drop since 2022. Peter Tuchman, the Einstein of Wall Street, who hosts the MNN podcast Trade Like Einstein, reported from the floor today.
And here's what he had to say.
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Chapter 2: What are the benefits of the Chime Credit Builder Card?
labor market is still growing, but there are warning signs that hiring could slow in the coming months. In February, the economy added 151,000 jobs, which was below the 170,000 jobs economists had expected, but higher than January's gain of 125,000. The unemployment rate ticked up to 4.1 percent from 4 percent, which doesn't sound like much, but it does show a slight softening in the labor market.
Meanwhile, health care and transportation were bright spots, adding 52,000 and 18,000 jobs respectively. But other industries struggled. Retailers cut 6,000 jobs and restaurants and bars shed 27,500 positions, which some economists attribute to immigration restrictions tightening the supply of available workers.
Meanwhile, the federal government lost 10,000 jobs, an unusually steep drop, likely due to the pressure from Doge. Although the White House is interpreting these numbers as a sign of economic resilience, uncertainty over tariffs, federal job cuts, and immigration policy could weigh on hiring in the months ahead.
Many businesses understandably are hesitant to expand their workforce when they don't know how supply chains, costs, and regulations will shift. And while the Federal Reserve is expected to hold interest rates steady at its upcoming meeting, concerns about economic instability could change that outlook if job losses continue.
We had been expecting the Fed to continue some rate cuts this year, but Morgan Stanley is now saying that rate cuts could be pushed back even further because of Trump's tariffs. which could cause a temporary spike in inflation. Even beyond the stock market dip today, we see investors' fears elsewhere. When investors get spooked, we often see a rush to so-called safe haven assets like bonds.
Investors poured into U.S. Treasury bonds, which pushed yields lower. The VIX, which is the go-to index for volatility, is also known as Wall Street's fear gauge. That spiked to its highest level this year. Even Bitcoin fell below $80,000 as investors pulled money out of riskier assets.
Basically, we're seeing investors shift their money out of stocks and into safer investments, which only adds to the market downturn. One of the positive signs I'm seeing is that there's so much cash on the sidelines that people are waiting for things to be on sale that it will prop up the stock market from getting even nastier.
Now, if you're wondering if this is really as bad as it sounds, well, we're not in recession territory yet. A recession is typically defined as two consecutive quarters of economic contraction.
But the warning signs are flashing, namely increased layoffs, low consumer confidence, major banks cutting their growth forecasts, and key data points like the yield curve and Buffett's recession indicator all pointing in the wrong direction. Side note here, if you want to learn more about those recession indicators, I've linked the videos I did about those in the show notes.
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