Context Matters. The Stock Market Drop Is Less Scary Than It Seems.<br />But regardless of which it becomes, it’s good for everyone’s mental health to look beyond the day’s headlines<br />and focus instead on percentage changes instead of point changes — and on historical patterns and the “why” behind the day’s drop in the markets.<br />Even after that trend reversed during the Monday sell-off, interest rates are still higher after this<br />drop in markets (2.7 percent at Monday’s close) than they were before (2.66 percent on Jan. 26).<br />That pattern happens because a weaker economy implies not just lower corporate profits (hence the falling stock indexes)<br />but lower inflation and continued low interest rates from the Federal Reserve (which implies bonds are more valuable and their yield should fall).<br />The 7.8 percent drop in the Standard & Poor’s 500 over the last six trading days is similar in scale<br />and speed to drops in January 2016 and August 2015, neither of which left lasting scars, and is short of the 10 percent drop that would qualify as a market correction.
