Why did American share prices fall sharply on February 5, 2018? What are the major contributing factors to this?

  • $\begingroup$ Many arguments are being made. My bet is on the fear of high interest rates. $\endgroup$
    – Hot Licks
    Feb 6 '18 at 2:56
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    $\begingroup$ This may be best asked on the Quantitative Finance stack exchange. I used to write market commentary, and my opinion is that it is extremely difficult to pin down causality in a case like this. There were no fundamental economic news that could plausibly associated with the drop in prices on the day, so it is most likely the result of some investors being forced to sell. In particular, implied volatility spiked, causing margin calls for short volatility strategies. $\endgroup$ Feb 6 '18 at 12:00
  • $\begingroup$ @BrianRomanchuk I didn't know that there was a Stack Exchange site for Quantitative Finance, thanks. $\endgroup$ Feb 6 '18 at 12:12
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    $\begingroup$ Finance questions are on-topic on this site. A question about a specific event like this is hard, if not impossible, to really answer. But this question is on-topic---and it could potentially live on either this site or quant.SE. See economics.meta.stackexchange.com/questions/1341/… and economics.meta.stackexchange.com/questions/1844/… $\endgroup$
    – jmbejara
    Feb 9 '18 at 15:53
  • $\begingroup$ Here's some commentary about the recent fluctuations from an economist's perspective: johnhcochrane.blogspot.com/2018/02/stock-gyrations.html $\endgroup$
    – jmbejara
    Feb 9 '18 at 15:55

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