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The Dow fell 1,861 points Thursday, the fourth worst one-day point drop on record, and the S&P 500 and the Nasdaq sank 5.9% and 5.3%, respectively. It was the worst one-day decline for the major averages since March 16.
Why it happened: Various media reports have pointed to an increase in COVID-19 cases and deaths (which had been happening for at least a week) and the Fed's dour economic outlook at its June policy meeting (which was little changed from its dour economic outlook in April).
- But no one really knows.
Why it matters: It could mark the end of a rally that has seen the S&P rise more than 40% in the best 50-day stretch in history and the Nasdaq hit an all-time high above 10,000 points.
- Or it could not.
The big picture: It was just one day.
- Retail traders who have signed up in droves over the past three months may be getting their first taste of a big selloff, but they have proven unafraid of volatility.
- Institutional asset managers, on the other hand, have not shown the same conviction and were just starting to dip their toes back into the stock market.