Dow Jones TUMBLES: Is this the beginning of US stock market crash?

On Tuesday, Jan 30th, Dow Jones dropped nearly 400 points which creates fear that the S&P 500 could end its record streak without consecutive declines. This is the steepest decline in eight months, because of rising bond yields and sell-off in healthcare. Amazon, Berkshire Hathaway and JP Morgan mentioned that they plan to form a venture aimed at lowering healthcare costs for their employees, which led to falling shares of healthcare related companies. The stocks on Wall Street fell by around one percent.

Stocks also fell lower due to a decline in energy shares along with ongoing evidence of a rise in crude oil prices. The S&P health sector fell by 1.8%, the most among the 11 major sectors. Health insurer UnitedHealth's shares dropped by 3.2%, Express Scripts' shares fell by 6.2% which weighed the most on NASDAQ and S&P. Pfizer shares price fell by 3.3%.

Investors were negatively affected by the two day decline on Wall Street and this pushed people into the arms of the safety of US government bonds. The Federal Reserve started its two day monetary policy meeting following the crash, and there is a market expectation of a hike of 5.2% to be implemented. Investors are getting worried about inflation which has led some people to believe that the Federal Reserve might be more aggressive when raising interest rates.

In the article, it is also mentioned that the dollar exchange rate index fell following the crash. But overall, with a healthy economy of low unemployment rates and high economic growth rates, the inconsistency lies within the stock market, as said by analyst Charles Schwab.

In such a situation of declining stock prices in the health sector, this would negatively affect investors in the short run by decreasing their optimism towards investing in the future, thereby affecting firms in the health sector in the long run.