(NewsNation) — Both former President Donald Trump and Vice President Kamala Harris are emphasizing the economy to voters after the stock market plunged Monday and rebounded Tuesday.
All three indexes were up 1% to 2% Tuesday afternoon. Trump took advantage of Monday’s Wall Street sell-off to attack his opponent, calling it the “Kamala crash” and warning of “the probability of World War III” if voters elect Harris.
Trump took to social media to post, “Trump cash vs. Kamala crash!” The former president posted at least 10 times Monday, seemingly working to raise fears about an economic downturn and placing Democrats at fault.
However, some Democrats are also sounding the alarm. One Democratic National Committee member told Politico the market slide is a “tremendously huge problem” for the Harris campaign, adding that he believes Democrats can’t win “if people think we are headed into a recession.”
Speaking at a rally last week, Harris said she plans to build up the middle class, calling it a defining goal of her presidency. Her team has signaled she’ll continue to hammer Trump’s record on the economy.
The economy has weathered a storm of trouble over the past several days with a disappointing July jobs report on Friday and an atrocious day for Japan’s market, which was doing better Tuesday after its worst day since 1987 on Monday.
The unemployment uptick set off a reliable recession indicator known as the “Sahm Rule,” which has been triggered early in every recession since 1970. However, Claudia Sahm, the former Fed economist the rule is named after, has urged caution, suggesting this time could be different due to unique postpandemic labor conditions.
Meanwhile, some economists say they’re worried the Federal Reserve was too cautious about cutting interest rates.
“The Federal Reserve has been keeping interest rates very high for a long time in order to slow down the economy and bring inflation back to where it wants to be,” said Seth Sutel, a finance reporter for the Associated Press.
The decline in the S&P 500 comes less than three weeks after hitting an all-time high. Despite the uptick in unemployment numbers, other economic indicators, such as retail sales, payrolls and industrial production, may be embraced by the candidates.
While Harris has been enjoying what some have called a honeymoon phase after President Joe Biden announced he’d drop out of the race, it’s unclear whether she can hold onto that energy moving forward given the state of the economy.
