Today, the United States stock market suffered a historic crash, that reverberated throughout Wall Street. The Dow Jones Industrial Average dropped over 1,000 points, and along with it, the S&P 500 and Nasdaq Composite both dropped sharply as well. This drastic drop started due to a perfect storm of economic uncertainty, geopolitical concerns, and panic from investors.

Key Drivers of the CrashInterest Rates Rising The Federal Reserve has been rapidly increasing interest rates to counteract inflation. Rising interest rates reduce the ability for consumers and businesses to borrow money, resulting in slower economic growth.

This indicates to investors that continued interest rate increases will lead the country into recession.Geopolitical Concerns War and disagreement amongst the worlds economic super powers has created instability in the markets. Investors worry about trade restrictions, sanctions, and bottlenecks in supply chains that will hurt companies bottom lines.

Sell Off of Tech Stocks Tech stocks that have driven market growth for the past several years, experienced massive sell-offs. Some of the biggest companies in the U.S. such as Apple, Microsoft, and Tesla lost significant value as investors moved away from high-growth potential stocks due to concerns that demand may slow.

Weak Corporate Earnings Multiple large company’s have recently reported lower than expected earnings, which appears to have led to a larger concern about the overall health of the economy. If consumers spend less money, companies earnings will drop which will lead to more economic problems.