The attack on the world trade center in the early morning of September 11, 2001 was a devastating blow to the U.S economy, which had a slight impact on the world economy. This devastating crisis hit the U.S economy at a point when it was already facing serious economic difficulties. Since the beginning of 2000 the US economy has been steadily moving towards recession probably quite a deep recession event without the events of 9/11, Even though the ruthless attack was uncalled for, however one could say it bailed the Bush administration out of an economic downturn. Prior to the attacks, there has been unprecedented speculation on how the economy is growing, but ignoring the levels of debt, the U.S stock market which heavily depends on inflow of investment from foreign countries was affected physically and financially by the atrocity. .
There are several perspective one could look at how the attack benefited the stock market, the month of march 2001 recorded the lowest the stock market has ever traded, prior to 9/11. This was dues to the collapse of technology stocks during the month of March; however during that period stock prices remained overvalued in relation o company profits. Therefore even without the attack on the world trade center the stock market was falling, but the effect of the attack further damaged trading and brought about the sharpest fall since 1929-31.
The adverse effect of this fall in the stock market, wiped out the wealth-effect, leaving both consumer and investors in disarray. There was a tremendous number of job losses reported both in the U.S and abroad, this indicates the dependability of the stock market to the world. The war damaged consumer confidence in spending and investors belief in investing, but the U.S economy being what it is known for will always bounce back. .