All 30 Dow Jones stocks fell, and only 25 stocks in the S&P 500 were trading higher on Monday.
Stocks also fell on Friday as the market snapped a four-week winning streak. Markets rebounded in July and August after the brutal first half of 2022. But the pendulum may swing back into pessimism.
This has led more market watchers to speculate that the Federal Reserve may remain aggressive with raising interest rates for the foreseeable future. The odds of a rise of another 75 basis points against a rise of half a point are now seen as around 50-50.
“Market expectations of what the Fed will do have a track record of volatility based on economic data,” Lindsey Bell, chief financial and markets analyst at Ally Invest, said in a report released Monday. “As long as the Fed is in the driving seat, volatility is likely to remain high and the market will remain regressive.”
“This has been like a bullish rally in a bear market,” Oktay Kavrak, director of product strategy at Leverage Shares, said of what has happened to stocks in the past few weeks. “Recession is still a fundamental case and inflation is still stubbornly high. This could be one of those years when the market is still volatile.”
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