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DOW plunges from bull market to bear market

A "bear market" is triggered when markets fall 20% from a year's highest close.

NEW YORK — It's an economic development we haven't seen in 11 years. On Wednesday, the DOW plunged from a bull market to a bear market, dropping more than 1,400 points in a single day.

A "bear market" is triggered when markets fall 20% from a year's highest close – and we saw a record high for the DOW just last month.

The last time the U.S. was in a bear market was from 2007 to 2009, amidst the housing crisis.

On Wednesday night, President Donald Trump said America's economy is equipped to handle this drop.

"This is not a financial crisis. This is just a temporary moment of time that we will overcome together as a nation and as a world," President Trump said.

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If you're not an investor, you may not think a bear market affects you. But an economic expert from the University of Texas at Austin told KVUE this will likely lead to a drop in interest rates and hit retirement and savings accounts. 

"If you're young enough that you're not retiring anytime soon, most likely you can wait it out and the market will go back to normal at some point in the future," said John Doggett, a senior business lecturer for the McCombs School of Business.

President Trump also asked Congress to increase funding for the Small Business Administration by $50 billion to issue loans to small businesses that may be struggling because of the coronavirus.

WATCH: Stock market takes a dip due to coronavirus

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