At one point, the Dow was down more than 1,600 points before slightly rebounding at the closing bell.
The previous record decline for the Dow came on Sept. 29, 2008, at the height of the global financial crisis, when it fell 778 points. The Dow is still up 21 percent compared to a year ago.
Health care, energy and financial stocks posted the largest declines. All 11 sectors of the S&P 500 were down.
"When you've gone 18 months without a 5 percent pullback, so you would expect one," Frederick said.
He said the market has “been going almost straight up since the start of the year,” adding that the pullback was “expected and healthy."
“It doesn’t mean the bull market is over; it simply takes away some of the froth and irrational exuberance from stocks and puts us back on a more sustainable trendline," Frederick said.
"People need to be a little bit cautious," Frederick said. "It's time to sit back and wait because we might not have hit bottom."
"America is once again open for business," Trump said in his speech.
White House press secretary Sarah Sanders downplayed the stock market drop as a part of a normal seesaw of the market but maintained that the overall direction of the economy under Trump is strong.
The political challenge for the White House is trying to distance the president from a bad day on the stock market. Trump, of course, has been quick to take credit for the stock market on its good days.
But Frederick said Powell's taking over the helm of the Fed likely had little effect on Monday's market swing because Trump announced he was his pick to head to Fed back in October.
"If the market is going to react to that kind of news, it's generally when it is broken," Federick said.