The Dow Jones Industrial Average closed on Wednesday down by 1,123 points, marking the 10th consecutive day of losses.
The Dow’s drop was the longest losing stretch for the index since it fell 11 consecutive days from Sept. 20 to Oct. 4, 1974. Another 11-day losing streak was reported in 1971. A nine-day losing streak also occurred in February 1978.
Other indexes fell on Wednesday: S&P 500 dropped 3% and the Nasdaq Composite Index dropped 3.6%.
The losses were reported as President Joe Biden’s economic policies have been compared to those of former Democratic President Jimmy Carter’s when record-high inflation caused economic misery.
Eleven months into Biden’s term, inflation reached a 31-year high and gas prices surpassed a seven-year high, The Center Square reported.
While Biden’s pledge to impose a Crude Oil Windfall Profits Tax on U.S. oil and natural gas companies if they didn’t increase production to “bring down gas prices” never materialized, it was reminiscent of Carter’s Crude Oil Windfall Profits Tax Act of 1980. Carter imposed a 70% excise tax on some oil sales in response to record-high inflation, saddling Americans with sky-high grocery prices, housing costs and long gas lines, The Center Square reported.
Under Biden, stringent policies were imposed against the U.S. oil and natural gas industry, leading to high energy costs and high gas prices at the pump. Numerous lawsuits were filed after production on federal land was hamstrung. By contrast, production soared on privately held land led by Texas producers, The Center Square reported.
Described as the “limping giant,” the U.S. economy in 1974-1975 was greatly impacted by historic inflation, a recession, an energy crisis and financial instability, The Federal Reserve Bank of Minneapolis explains.
It fell in the middle of the Great Inflation of 1965 to 1982, which was blamed on Federal Reserve policies. Fed policies were described as “the greatest failure of American macroeconomic policy in the postwar period,” during which the US economy suffered from “four economic recessions, two severe energy shortages, and the unprecedented peacetime implementation of wage and price controls,” according to Federal Reserve History.
The Dow is falling for several reasons, including after the Federal Reserve announced it cut the baseline interest rate by a quarter of a point and would only likely implement two rate cuts in 2025, less than expected by financial analysts.
The Fed’s rate cut was the third since September. The benchmark lending rate is now between 4.25% and 4.5%.
“Recent indicators suggest that economic activity has continued to expand at a solid pace. Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee’s 2 percent objective but remains somewhat elevated,” the Fed said in a statement.
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.”
Another factor contributing to the Dow’s fall is because it’s weighted, the higher a company’s share price, the greater the impact.
As health insurance became less affordable under Biden, President-elect Donald Trump has signaled reforms could be coming. Lawmakers have also proposed reducing costs including by potentially eliminating the role of pharmacy benefit managers.
In response, companies listed on the Dow saw shares drop. The company with the highest stock prices on the index, UnitedHealth Group, lost 20% of its value; CVS Health and Cigna lost 24% and 20%, respectively.
The losses on Wall Street came as the U.S. is facing a $2 trillion deficit next year and the national debt surpassed $36 trillion under Biden.
Biden’s economic record includes large numbers of nationwide layoffs; food stamp costs for family meals increased 31% over three years; car insurance rates increased 26% nationally, with some states reporting 44% increases in one year; home buyers needing 80% more income to purchase a home than they did four years ago; and to combat hard economic times; one CEO recommended Americans eat cereal for dinner, The Center Square reported.
Biden’s record also involved blaming businesses for higher consumer costs, or “shrinkflation,” and proposing higher taxes on corporations to reduce the federal deficit. He also claimed he reduced the deficit, The Center Square reported and fact checked to be false.
