Hoosier expert urges against overreaction to ‘natural correction’ in stocks

INDIANAPOLIS — Major stock indexes tanked Monday, and recession fears heightened after President Donald Trump declined to say there would not be one.

The Dow Jones Industrial Average dropped nearly 900 points. The S&P 500 closed down 2.7%, and the Nasdaq Composite fell 4% Monday.

The trade war is also putting the country in new territory, with fresh tariffs from Canada and China targeting the U.S.

But while Wall Street is seeing red, experts 13News talked to say people shouldn’t panic. One Indiana University professor says this is statistically just a natural correction in the market.

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“Right now, there’s a little bit of uncertainty, and again, we’re also coming across coming after two years of tremendous growth, very unusual growth, like double what it normally would be for two years in a row,” said Joe Fitter, senior lecturer of finance at IU. “So you would expect, in any situation, you might give a little bit of that back, and that may be some of what’s happening here.”

Fitter also explains that while headlines may create uncertainty, to qualify as a recession, the stock market would have to report two quarters of negative growth. Right now, we’re only in the first.