A clickbait crash?
The significance of equity market losses is best viewed against the calm of past months. This is a rather abrupt reminder of what volatility looks like. Nothing has changed in economic terms. Sentiment and sensationalist language designed to increase Twitter followers and article clicks (follow me @PDonovan_Econ) seem more plausible explanations than anything real world.
A sustained decline in equities would have economic feedback. Listed companies are not very important economically - a minority of employment and economic activity. The wealth effect on consumers is important, although labor markets can outweigh that. Most Americans have a job. Almost half of Americans do not own equity.
In Bitcoin terms, equity values are soaring. Bursting the Bitcoin bubble is different from equity moves. Equities have broad but shallow ownership, with fundamental foundations. Bitcoin ownership was narrow (few people were sucked in) but deep (some people bet everything they owned), and without fundamental foundations. Individual Bitcoin bubble losses may be economically irrelevant, but personally devastating.
This is not really a day for economic data although the politically sensitive US trade data is due (imports stimulated by tax cuts will not yet be in evidence). Weidmann of the ECB speaks after predictably dovish comments from Draghi.