COLUMBUS (WCMH) — Stocks closed sharply higher on Wall Street Tuesday after another turbulent day of steep ups and downs. The Dow Jones industrial average gained 567 points, or 2.3 percent, recouping nearly half of the 1,175-point plunge it took the day before.
Big drops Friday and Monday erased the Dow’s gains for the year. By Tuesday, it was once again slightly higher for 2018.
About half of all Americans have money in the stock market – most through their 401K retirement accounts.
The other half is less likely to worry about market ups and downs. Eli Rousculp of Columbus says he is only vaguely aware of the stock markets wild swings over the past few days. “As someone without any money to put in the stock market – I could care less,” Rousculp said.
But even non-investors are affected by the underlying reasons for the market’s volatility. While the overall economy is strong, the market anticipates interest rates going up and inflation potentially increasing. That means consumers could soon pay more to borrow money and to buy essentials like groceries and gasoline.
Teri Alexander, a certified financial planner in Grandview Heights says the stock market needs to reset itself to a more normal bottom. “It’s not a bad thing,” Alexander said. “I think actually this is a very healthy move for the market.”
Alexander says investors should not panic but she adds that if the volatility keeps you up at night it might be time to reset your portfolio. “This is a real good test right now for people to say – is my asset allocation where it should be at this stage of the game or am I feeling really uncomfortable with this.”
Treasury Secretary Steven Mnuchin says the stock market has been “quite volatile” in recent days, but that has not shaken his view that the underlying economy is strong. Mnuchin said that he was not “overly concerned about the market volatility. I think the fundamentals are quite strong.”
Mnuchin said he had checked with market participants earlier Tuesday and had been assured that markets had functioned well with no systemic issues during the big market declines on Monday.