RACHEL MARTIN, HOST:
After a record point drop on Monday, investors were nervous as the stock market opened this morning. Joining us now, NPR business reporter Jim Zarroli. Hey, Jim.
JIM ZARROLI, BYLINE: Good morning.
MARTIN: So market futures were signaling that the Dow was going to start way down today. What happened?
ZARROLI: Yeah. It did go down. It fell 567 points. And then right now it's come back quite a bit. So...
MARTIN: So volatile.
ZARROLI: Yeah. And then that's not unusual. I mean, you know, in this kind of a period, the market can be very unsettled. We've seen drops all over the world this morning, a lot of markets down in Asia, in Japan and Hong Kong, in Europe. So this kind of uncertainty is really sort of all over the world right now.
MARTIN: And as we watch the ticker right now, I guess it's 50 points up. So this thing is, like, up and down.
ZARROLI: Right. And this kind of thing is - that is what happens at a time like this. The market, investors are just trying to sort of decide what direction things are going in. Lots of uncertainty. It's not unusual. I mean, we have to point out that in the past couple of trading sessions, much of the decline happened in the afternoon. So we have a long day ahead of us, and we don't know what's going to happen.
MARTIN: Is there a particular sector of the market we should be paying extra attention to today?
ZARROLI: You know, when something like this happens, it tends to affect every sector of the economy, every sector of the financial markets - commodities, bonds, everything. The dollar. The value of the dollar fluctuates. I think the real question right now is what's going to happen with interest rates? You know, we've had low interest rates for a very long time. They're still low, but when we had this unemployment report on Friday which suggested that wages have gone up significantly, that sort of revived concerns about inflation, got everybody wondering again what the Fed is going to do.
MARTIN: Can you make that connection, Jim? Just because people will hear that and think, wages are going up. That's a good thing. How can that mean that my retirement fund is going down?
ZARROLI: I think - right, it is a good thing for workers. It's something everybody's been waiting for a long time. You know, and it gives a lot of people something to be happy about. But the markets see that, stock investors see that and think, you know, how much are interest rates going to go up? How much is the Federal Reserve going to crack down? Are we going to see rates go up? And that can hurt a company's bottom line, and it gets people wondering sort of, you know, what overall direction the economy is going in.
MARTIN: Can you give us some historical perspective on this? I mean, when you look at yesterday, it was a 1,175 point drop. That's a lot, but it still represented less than 5 percent in market value, right?
ZARROLI: Yeah. I mean, that is a lot in points, of course. But, you know, when the Dow is at 10,000, as it was not all that long ago, that's a really big drop. But when it's at 25,000, you know, in percentage terms that's not so much. This is the kind of thing, you know, it's happened many times. It will happen again. The market goes up and, you know, usually over time, and sometimes it falls back again.
MARTIN: So it's a natural correction, you're saying.
ZARROLI: Yeah.
MARTIN: So far.
ZARROLI: And I don't think there's anything in the economy that's, you know, major that's really changed right now to suggest that, you know, things are weaker than they were. We have this question about the tax cuts and bringing money into the economy and what that will mean for businesses and consumers, but I don't think there's anything that should lead us to think that the economy has suddenly gotten substantially, you know, stronger or weaker than it was. I mean, we're just kind of - things are still pretty stable, and I think this will, you know...
MARTIN: This too shall pass, Jim?
ZARROLI: Well...
MARTIN: (Laughter).
ZARROLI: ...It always does. Let's say that.
MARTIN: Investors, drink your antacid and stay the course, I guess, is the message. NPR business reporter Jim Zarroli. Thanks so much, Jim.
ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.
