The New York Stock Exchange (NYSE) is a bustling hub of activity where traders work tirelessly to navigate the ups and downs of the stock market. This past week, the market experienced extreme volatility, with the S&P 500 making a remarkable comeback from Monday’s sharp decline.
On Friday, the S&P 500 was relatively flat, inching up by 0.1%, but still down by just 0.4% for the week. The Nasdaq Composite also slipped by 0.1%, while the Dow Jones Industrial Average hovered near the flatline. This rollercoaster week marked the most volatile period of 2024 for the market.
The market turmoil on Monday saw the Dow plummet by 1,000 points and the S&P 500 lose 3%, marking its worst day since 2022. The catalysts for this sell-off were disappointing U.S. payrolls data from the prior week, concerns about the Federal Reserve’s timing of rate cuts, and the unwinding of a popular currency trade by hedge funds.
However, the market staged an impressive recovery later in the week, with Thursday’s positive weekly jobless claims data helping to ease investors‘ fears about the U.S. economy. The S&P 500 surged by 2.3% on Thursday, the Dow soared by roughly 683 points, and the Nasdaq Composite added nearly 2.9%.
As the week draws to a close, the major averages are on track to erase most of their losses. The Dow is down by just 0.7% for the week, and the Nasdaq is off by only 0.6%. At its lowest point on Monday, the S&P 500 was down nearly 10% from its recent all-time high, while the Nasdaq had entered correction territory with a decline of over 10%.
Investors showed resilience by buying the dip, confident that the market turmoil was not indicative of a larger crisis or recession. The week’s losses were largely attributed to technical factors, such as the unwinding of yen carry trades, rather than fundamental economic concerns.
The volatility in the stock market also impacted other asset classes, with the 10-year Treasury yield fluctuating between 3.70% and 4%. Stocks like Meta and Eli Lilly led the market rebound, with Meta up by 5% and Eli Lilly surging by 11% on Friday.
Despite the recent market turbulence, Solita Marcelli, UBS Global Wealth Management chief investment officer Americas, remains optimistic about the market’s prospects. Marcelli believes that investors should not overreact to swings in market sentiment and predicts that the S&P 500 will rebound to 5,900 by year-end.
In conclusion, the stock market’s wild ride this week serves as a reminder of the unpredictable nature of financial markets. Traders on the floor of the NYSE continue to navigate these fluctuations with skill and determination, ready to seize opportunities and weather challenges in the ever-changing world of finance.