Traders works on the floor of the New York Stock Exchange (NYSE) at the opening bell on March 5, 2026 in New York City.
Angela Weiss | Afp | Getty Images
The Dow Jones Industrial Average fell more than 1,000 points on Wednesday after the Federal Reserve decided to keep interest rates steady while U.S. oil neared $85 per barrel.
In the last five years, the blue-chip index has closed down more than 1,000 points nine times. Typically, the index tends to fall in the week after the large decline, but then performs well in the one-month and three- month periods that follow.
The Dow is flat on a median basis a day after falling 1,000 points in one session. One week after, its performance worsens with a loss of 1.14%. One month after the fact, however, the Dow sees a median gain of nearly 2%. Three months after, that gain balloons to 9.1%.
Three of the nine 1,000 point drops happened amid the fallout after President Donald Trump’s “liberation day” in April 2025, when he announced sweeping reciprocal tariffs on countries across the globe. The Dow and the broader market rebounded after their initial two-day dramatic fall once Trump announced a 90-day pause on the tariff plan, though the blue-chip average fell again on April 10 as high tariffs on China remained.
U.S. equities began to recover later in April after Trump and China signaled trade tensions were easing.
Four other drops happened in 2022. Inflation was surging that year, and the Federal Reserve hiked its overnight rate multiple times to contain it. Investors worried that higher rates could lead to an economic slowdown and potentially a recession, pushing the Dow and the other major averages to fall into bear market territory.
Markets bottomed in October 2022 and the current bull market began.
The other two big drops for the Dow were in August and December 2024. The former was driven by concerns over the U.S. labor market after a weaker-than-expected jobs report and a sharp fall in the Japanese stock market, while the latter was caused by the Federal Reserve indicating it would take a cautious approach on cutting interest rates.
Dow, 1-day
Currently, investors are worried about the Fed’s decision to stay on the sidelines at the conclusion of its July 2026 meeting amid above-target inflation. It came while oil prices rose again after Trump promised to hit Iran in retaliation for a surprise attack on American forces. While the central bank decided to maintain rates at the current range of 3.5% to 3.75% for now, three members dissented in favor of a hike, indicating rising rates may be on the horizon.
Going by history, the fallout from this one-day decline may linger further.
— CNBC’s Fred Imbert contributed reporting