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President Donald Trump had a blunt message for anyone with a 401(k) Thursday evening.
He posted on Truth Social: “The Stock Market suffered one of the Worst Days in History based on the results of the Election.” He added: “Your 401(k)s have, therefore, dropped.” (1)
He’s right about the second part. On Thursday, the Dow Jones Industrial Average fell 1,833.06 points, the S&P 500 lost 334.89 points and the Nasdaq composite sank 1,421.52 points, The Associated Press reported. (2)
But “one of the Worst Days in History”? I was a stockbroker on Black Monday in 1987, when the Dow lost 22.6% in a single day. (3) The Dow’s drop Thursday was about 3.4%. (4)
So who’s right about what just happened to your retirement money? Here’s my take, claim by claim.
1. “Your 401(k)s have, therefore, dropped” — true, but how much depends on you
Trump’s not wrong here. If you own stocks or stock funds in a 401(k) or IRA, Thursday most likely cost you money.
Fox Business reported the S&P 500 dropped 4.36% and the Nasdaq sank 5.52%. (4) How much you lost depends on how much of your account is in stocks.
Here’s a simple example. Say you have $400,000 in a 401(k), with 60% in an S&P 500 index fund and 40% in bonds and cash. A 4.36% drop on the $240,000 in stocks costs you about $10,464.
Put all $400,000 in that same stock fund, and the hit is about $17,440 — in one day.
If you don’t know which of those people you are, that’s the real problem. And it’s the kind of question a good advisor can answer in one meeting.
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2. “One of the Worst Days in History” — not where it counts
In points, Thursday looked terrifying. A 1,833-point drop is a big number, and Trump is right that it was a big day.
But points aren’t what your account feels. Percentages are. The Dow closed at 51,523.06. The 1,833-point drop was about 3.4% of its value going into the day. (2)(4)
On Oct. 19, 1987, the Dow lost 22.6% in a day. (3) I was a stockbroker that day. Thursday was less than a sixth as steep.
Even by recent standards, it wasn’t history-making. The AP called the S&P 500’s drop its worst day since President Trump’s tariff announcement shook markets in April 2025. (2) That’s bad. It’s not historic.
3. “Based on the results of the Election” — partly right
Here, Trump has a point. The AP reported that Democrats’ nationwide wins “raised the possibility that governments could force pauses” in construction of more data centers. (2) Fox Business also cited concerns about potential new AI regulations after the midterms. (4)
But the AP also pointed to another worry that’s been hitting AI stocks for months: how expensive it’s become to borrow money. (2)
And remember, the election moved stocks in both directions. Yahoo Finance reported that Thursday’s selloff erased the gains from Wednesday’s post-election rally. (5)
If you’d made investment decisions based on Wednesday’s headlines, Thursday would have taught you a painful lesson.
4. The real damage came from AI stocks — and you may own more than you think
The selloff was “led by stocks tied to the buildout of AI data centers,” according to the AP. Nvidia, the chip company that became the face of the AI boom, fell 9.3%. (2)
You may never have bought a share of Nvidia. You may own some anyway.
The Securities and Exchange Commission explains that in a market-cap-weighted index, the biggest companies “account for a greater share of the overall value of the index.” (6)
So check whether your index fund weights companies by size. If it does, the biggest tech companies carry the most weight.
Then look at the fund’s top holdings. If a handful of AI names make up a big slice, Thursday won’t be the last day that matters to you.
Quick aside — most internet financial advice comes from people who weren’t alive during the last recession. I’ve been writing about money for more than 35 years. Want rock-solid advice? Sign up for the free Money Talks Newsletter. Takes 10 seconds. No fluff. No spam.
5. Don’t let a post — from anyone — run your retirement
Wednesday’s headlines said stocks loved the election. Thursday’s said they hated it. Both days were noise for anyone investing for the long haul.
What matters is whether the money you’ll need soon is safe from days like Thursday. The SEC notes that people with a shorter time horizon “may prefer to take on less risky or less volatile investments.” (7)
A good rule: Money you’ll need in the next few years doesn’t belong in stocks. Park it somewhere boring, like a high-yield savings account or a CD. If you’re shopping for one, you can compare an online account like Barclays Online Savings.
And if your stocks have grown into a bigger share of your account than you planned, rebalance. The SEC says rebalancing “forces you to buy low and sell high.” (7) That’s a plan, not a panic.
My honest take
Trump got one thing right: Your 401(k) dropped. He got the history wrong in percentage terms, and he got only part of the “why” right.
But here’s what matters more than who’s to blame. Politicians on both sides will take credit for good days and assign blame for bad ones. The market doesn’t care.
I’ve lived through and traded during Black Monday, the dot-com crash, 2008 and the 2020 pandemic crash. Each one felt like the end of the world to a lot of investors at the time. What protected people was never their politics. It was having a plan before the bad day arrived.
If Thursday made your stomach drop, don’t panic-sell. Use it as a free warning, and fix your mix while the damage is still small.
Sources: 1. Truth Social (via Trump’s Truth archive); 2. The Associated Press (via TV News Check); 3. Federal Reserve History; 4. Fox Business; 5. Yahoo Finance; 6. Investor.gov (SEC); 7. Investor.gov (SEC)
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