Stocks Drop 3.4% as Advisors Tell Clients to Stay Put

Stock market advisors are telling clients to hold steady after a steep drop this week.

The S&P 500 posted its steepest one-day loss since April 2025 on Thursday. The Dow Jones Industrial Average fell more than 1,800 points, a drop of 3.4%. This decline wiped out the gains the index had made since the recent midterm elections.

Technology stocks led the sell-off, driven by concerns over the pace of data center construction following major Democratic election victories. The Nasdaq Composite fell 5.5% to close more than 10% below its recent peak. This move pushed the index into correction territory. Retail investors sold individual tech stocks heavily in response to the turmoil.

A flash poll conducted on Thursday afternoon reached out to 121 financial firms. Thirty-eight firms responded to the questionnaire. More than three-quarters of the responding advisors said investors should first verify that their asset allocation aligns with their financial goals. The consensus among these professionals is that short-term market movements should not drive long-term financial decisions.

Andy Pratt, director of investment strategy at Burney Wealth Management in Reston, Virginia, said ongoing contributions to retirement accounts can be beneficial during downturns. He explained that regular deposits allow investors to dollar-cost average, meaning they buy shares at lower prices when the market falls. This approach can improve long-term returns by entering the market at a more favorable valuation.

John Mullen, managing director and CEO of Parsons Capital Management in Providence, Rhode Island, summarized the prevailing advice as staying the course while watching for buying opportunities. He suggested that well-constructed portfolios often do not require major modifications during market stress. However, he acknowledged that panic can be a signal to reassess whether an investment still fits an individual's risk tolerance.

Carolyn McClanahan, a certified financial planner and physician in Jacksonville, Florida, advises clients to adhere strictly to their investment policies. She recommends that investors focus on their specific needs and tune out market noise. According to McClanahan, this disciplined strategy works effectively in maintaining financial stability during volatile periods.

Tra Sullivan, chief investment officer at Beaird Harris Wealth Management in Dallas, noted that the U.S. stock market has often risen in the 12 months following midterm elections. He views this as a general pattern rather than a guarantee. By Friday pre-market trading, Nasdaq futures showed signs of recovery, with chip stocks bouncing back. Dan Moisand, a financial advisor in Orlando, Florida, emphasized that resilience is often more profitable than attempting to time every market swing.